From the beginning of his campaign in 2007, Barack Obama offered a centre-left
programme of expanded public power in areas such as healthcare, energy and
the environment, education and infrastructure. In the months immediately
preceding the election, however, mounting economic pressures yielded an
abrupt economic downturn. Mr Obama thus assumed the presidency with two
agendas — the agenda on which he campaigned, and the agenda that events had
forced upon him. Many commentators believed that he would be forced, or at
least well advised, to defer the former until he had implemented the latter.
The new president disagreed, arguing that short-term economic recovery and
long-term economic renewal were inextricably linked. He has wagered his
presidency on the proposition that the US budget and political system can
simultaneously absorb an economic stimulus, bail-outs of financial
institutions, the housing sector and the automobile industry, comprehensive
regulatory reform… and a social-democratic programme not seen since the days
of Lyndon Johnson, perhaps even Franklin D Roosevelt (FDR).
“Uncharted waters” may be the cliché du jour, but it captures the widespread
sense that America is trying to navigate without maps. The governing
assumptions of the past three decades have been discredited. Markets are not
always self-correcting; financial innovation does not always enhance, or
regulation always impede, efficiency and growth. But diminished faith in
markets does not necessarily mean enhanced faith in government. Shortly
before Obama took the oath of office, Americans’ trust in their national
institutions reached the lowest level ever recorded. A key question is
whether the public will support, and Congress will enact, a programme that
relies so heavily on the capacity of the national government to serve as an
effective instrument of national purpose This is in part a question of
fiscal capacity. Estimates of budget deficits averaging nearly $1 trillion
each year for the next decade have sent shock waves around the world. But
success depends as well on Obama’s ability to manage his agenda, as it does
for every president determined to make more than incremental change. An
experienced public official offered a blunt assessment of one new chief
executive: “[He] has proposed a huge restructuring of government, and people
are actually taking him seriously. The man… turns out to be downright
radical.” This was Ronald Reagan, who pushed through changes in spending and
taxes that redefined economic policy for a generation. After a week in
office, another newly minted president mused in his diary: “Everybody has
warned me not to take on too many projects so early in the administration,
but it’s almost impossible for me to delay something that I see needs to be
done.” That president was Jimmy Carter, whose flood of proposals soon had
Congress bogged down in near-gridlock. By the end of his first year, America
was beginning to wonder whether Carter was up to the job.
Will Obama turn out to be as successful in pushing his agenda as Reagan, or as
unsuccessful as Carter? The core issue is the clarity and self-discipline
needed to maintain control of the agenda. Consider the judgment of Erwin C
Hargrove, a respected scholar of the presidency, rendered after Reagan’s
first 100 days: “Reagan has demonstrated, in a way that Jimmy Carter never
did, that he understands how to be president. He knows that a president can
deal with only a relatively small number of issues at a time.” Hargrove
might have added that the same is true of Congress, a fact every president
must keep firmly in mind.
Supporters of the current administration’s approach might retort that it’s
1933, not 1981, and the relevant model is FDR, not Reagan. The US is heading
toward its grimmest year in generations, and so we need bold action on a
broad front. But consider how FDR governed. Although he assumed office with
nearly unchecked power — in 1933, the Democrats held majorities of 313 in
the House and 59 in the Senate — he was careful to focus his early domestic
policy almost exclusively on the economic emergency. Believing that the
banking crisis was at the heart of the crisis of confidence, he declared a
banking holiday within two days of taking office. Four days later, on March
9, he introduced the Emergency Banking Act, which Congress enacted the same
day.
By contrast, Roosevelt delayed most of the structural reforms that did not
bear directly on the economic emergency. While he was more sensitive than
previous presidents to the links between seemingly disparate issues, these
interconnections in his view did not warrant trying to move on all fronts at
once. The people and Congress had to be brought along with an agenda they
could understand. FDR never believed that his capacity to legislate would
wane after his first year in office. On the contrary, he used early momentum
to build popular support, yielding further congressional gains in 1934 and a
massive landslide in 1936.
There is another objection to the “2009 = 1933” thesis: current circumstances
in the US do not approach the gravity of the situation FDR faced when he
took office. To date, GDP has fallen at an annual rate of about 6% from its
2008 peak; by 1933, GDP had fallen nearly 40% from four years earlier.
Unemployment is now 8.1%, up from 4.9% a year ago; by early 1933,
unemployment was 25%, including 37% outside the agricultural sector. Today
the banking system is in deep trouble, but at the start of the New Deal it
was much worse. As FDR took office on March 4, 1933, all 12 Federal Reserve
banks were closed, and banks in 37 states had either limited withdrawals or
shut their doors. The American people are not prepared to give the president
and his party the degree of deference that Roosevelt and the Democratic
Congress enjoyed at the start of the New Deal — all the more reason for
Obama to distinguish between short- and long-term measures at least as
carefully as FDR did.
The budget deliberations in the House and Senate will define the limits of
presidential aspirations, at least for this year. Developments thus far
suggest that the president will not be able to enact cap-and-trade
legislation (the linchpin of his climate-change agenda) or to make permanent
his redistributive tax cuts. On the other hand, the congressional budget
initiatives will not prevent fundamental health- insurance reform from
moving forward. In fact, there is far more consensus about the contours of
acceptable reform today than there was when Bill Clinton tried and failed 16
years ago. Paying for reform may well be the most formidable remaining
obstacle: helping poor- and moderate-income families to purchase health
insurance will cost an estimated $120 billion annually, and the
congressional budget committees have refused to endorse the tax increases
the Obama administration proposed to help pay for it. Given the dire fiscal
outlook for the next decade, with uncertainty rising that foreign
governments will be willing to fund US deficits, it seems unlikely that
Congress will adopt comprehensive health reform without an equally
comprehensive funding strategy.
One thing is clear: getting a historically anti-statist and tax-averse people
to go along with his plans will require all of President Obama’s
considerable persuasive powers.
William A Galston is Ezra Zilkha chair and senior fellow in governance studies
at the Brookings Institution in Washington, DC
Rivals in waiting
Hillary Clinton managed to transform her hostility to Obama into unshakable
loyalty, giving up her Senate seat to join his cabinet. Who knows if she
will get another chance at the big job, but Ann Lewis, a key adviser, has
just formed a new online group, NoLimits.org, to keep Clinton’s e-mail lists
alive — a sign that Hillary may yet run for president in 2016. Susan Rice
was Obama’s top foreign-policy adviser during the campaign, but was exiled
to New York after the election to serve as US ambassador to the UN. It keeps
her out of Clinton’s hair — but she’ll be back one day, possibly in
Clinton’s job. The national security adviser, General Jim Jones, has the
president’s ear — and an office in the White House. He is tough and
bipartisan — he was close to John McCain, the Republican candidate. The
geekish Treasury secretary Tim Geithner is tasked with saving the US
economy, but Obama has already had to fend off calls for his resignation.
There’s another powerful player: the flawed but brilliant Larry Summers, the
chief White House economic adviser, who lost his job as president of Harvard
when he claimed that men were better at science than women. SB
The young dudes
Jon Favreau, the 27-year-old director of speechwriting, is known as Obama’s
mind-reader for his ability to capture the president’s thoughts. A former
Time magazine blogger predicted that the laddish but cerebral “Favs” “will
get laid as often as he wants”. He went on to invite Harvard-educated
Alejandra Campoverdi to an inaugural ball. She posed in a corset for Maxim
magazine — but now has a job as a White House assistant. Reggie Love, 27, is
the student basketball star known as Obama’s bodyman or “chief of stuff”. He
accompanies Obama everywhere, carries his jacket, holds his BlackBerry,
orders his lunch and even loads his iPod. Eugene Kang, 25, organised the
campaign group Asian Americans for Obama, and is now close enough to the
president to play golf with him. SB
The high table
Rahm Emanuel gave up his seat in Congress to become Obama’s chief of staff.
Nicknamed Rahmbo, he is notoriously foul-mouthed: when he worked for Bill
Clinton he tried to browbeat Tony Blair, but Blair and Clinton fell about
laughing. He lost his middle finger in a meat-slicing accident. Obama said
it “rendered him practically mute” — but these days he is said to have
mellowed. Desiree Rogers, the White House social secretary, gets to decide
who has a place at the new Camelot — and for whom the door will not open.
Famously chic, she sat in the front row at New York fashion week next to
Anna Wintour, the editor of Vogue. Jackie Norris is Michelle Obama’s chief
of staff, having become close to her while campaigning in Iowa, where Obama
won his first victory against Hillary Clinton. The former high-school
teacher advises the first lady on how she walks the difficult line between
being seen as supportive to the president and getting stuck into policy
issues. Joe Biden, the vice-president, is known for his foreign-policy
experience, his pro-choice principles on abortion — he is Catholic — and his
propensity for gaffes: he plagiarised a speech by Neil Kinnock while
campaigning in the 1980s. He was appointed vice-president to lend Obama some
grey-haired gravitas, but unlike Dick Cheney he will never be seen as the
power behind the throne. SB
The engine room
Nancy Pelosi is the first woman speaker of the House — but was blamed for
allowing Obama’s $800m financial-stimulus package to be stuffed with pet
projects, which prompted Republicans to vote against it. The defence
secretary Robert Gates is known as “the survivor”. He served George Bush Sr
as the director of the CIA, and his son as defence secretary. David Axelrod
is the architect of Obama’s election victories and the man who persuaded an
unconvinced Obama to go with the slogan “Yes we can”. He is now Obama’s
senior adviser at the White House — his mission is to help the cool,
intellectual Obama connect with ordinary people. Janet Napolitano, the
former governor of Arizona, stuck her neck out by supporting Obama over
Clinton. As the secretary for Homeland Security she covers immigration,
natural disasters and terrorism threats. Eric Holder, the liberal
attorney-general, is determined to close Guantanamo Bay and has called
America a “nation of cowards” on race issues. Steven Chu is the brainy
energy secretary who won the Nobel prize for physics in 1997. He is in
charge of Obama’s “green” energy revolution. SB
The power couple
Samantha Power resigned during Obama’s campaign after calling Hillary Clinton a
“monster”. She is now back in favour with a job as a
foreign-policy adviser at the National Security Council. She is one half of
a White House power couple: she married Cass Sunstein (above), a Harvard law
professor and the co-author of last year’s bestselling book on public
policy, Nudge, after meeting him through Obama. He is also now in the White
House, in charge of regulating the bureaucrats. SB
PHOTOGRAPHS BY NADAV KANDER
Obama’s People, an exhibition of portraits of the leading men and women in
Barack Obama’s government, by Nadav Kander, is at Birmingham Museum &
Art Gallery until August 31. Visit www.bmag.org.uk
