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Obama Big Bang Could Backfire

Tuesday, 25 Aug 2009 08:08 AM

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WASHINGTON -- Barack Obama's Big Bang is beginning to backfire, as his plans for rapid, once-in-a-generation overhauls of energy, financial regulation and health care are running into stiff resistance, both in Washington and around the country.

The Obama theory was simple, though always freighted with risk: Use a season of economic anxiety to enact sweeping changes the public likely wouldn't stomach in ordinary times. But the abrupt swing in the public's mood, from optimism about Obama's possibility to concern he may be overreaching, has thrown the White House off its strategy and forced the president to curtail his ambitions.

Some Democrats point to a decision in June as the first vivid sign of trouble for Obama. These Democrats say the White House, in retrospect, made a grievous mistake by muscling conservative Democrats in swing districts to vote for a cap-and-trade energy bill that was very unpopular among their constituents.

Many of those members were pounded back home because Democrats passed a bill Republicans successfully portrayed as a big tax increase on consumers. The result: many conservative Democrats were gun-shy about taking any more risky votes — or going out on a limb on health care.

The other result: The prospects for winning final passage of a cap-and-trade bill this year are greatly diminished. And, while most Democrats still predict a health care bill will pass this year, it is likely to be a shadow of what Obama once had planned.

"The majority-makers are the freshman and sophomores from conservative districts where there's this narrative building about giveaways, bailouts and too much change at once," said a top House Democratic strategist, who requested anonymity to discuss internal politics candidly. "There's this big snowball building in those districts. That's why those folks are so scared."

David Axelrod, Obama's political architect, said it was "very clear early in the transition" that Obama would have to attack a number of festering issues simultaneously.

"The times demanded it," he said in an interview. "We didn't have the luxury of taking things sequentially, year after year, and hoping we got there. That's the reason that all these major issues had been deferred for decades: Change is hard."

Axelrod said the president is "looking forward to an active fall" when he returns from next week's vacation on Martha's Vineyard, and is not as worried about the outlook as the denizens of Washington, where "every day is election day."

But the "Big Bang" theory of governance, as some White House insiders called it, is not without risk and consequences.

By doing so much, so fast, Obama gave Republicans the chance to define large swaths of the debate. Conservatives successfully portrayed the stimulus bill as being full of pork for Democrats. Then Obama lost control of the health care debate by letting Republicans get away with their bogus claims about "death panels." The GOP also has successfully raised concerns that the Obama plan is a big-government takeover of health care — and much of Middle America bought the idea, according to polls.

By doing so much, so fast, Obama never sufficiently educated the public on the logic behind his policies. He spent little time explaining the biggest bailouts in U.S. history, which he inherited but supported and expanded. And then he lost crucial support on the left by not following up quickly with new and stricter rules for Wall Street. On Friday, New York Times columnist Paul Krugman echoed a concern widely shared among leading liberals. "I don't know if administration officials realize just how much damage they've done themselves with their kid-gloves treatment of the financial industry, just how badly the spectacle of government supported institutions paying giant bonuses is playing."

By doing so much so fast, Obama jammed the circuits on Capitol Hill. Congress has a hard time doing even one big thing well at a time. Congress is good at passing giveaways and tax cuts, but has not enacted a transformative piece of social legislation since President Bill Clinton's welfare reform of 1996. "There's a reason things up here were built to go slowly," said another Democratic aide.

By doing so doing so much, so fast, he has left voters — especially independents — worried that he got an overblown sense of his mandates and is doing, well, too much too fast. A Washington Post-ABC News poll published Friday found that independents' confidence in Obama's ability to make the right decisions had dropped 20 points since the Inauguration, from 61 percent to 41 percent.

Axelrod and others argue Obama had no choice but to tackle all of these issues at once. That might be true for a stimulus bill and the bank and auto bailouts — but that case is harder to make for energy and health care, which have been the focus of intense debate for decades past and probably will for decades to come.

Go-big-or-go-home isn't the only theory of the case that a new president can adopt. The most promising alternative is to build public support over time by showing competence and success, then using that to leverage bigger things.

So imagine if Obama had focused on fixing the economy, and chosen presidential power over congressional accommodation and constructed his American Recovery and Reinvestment Act as a true, immediate stimulus without the pork and paybacks.

He then could have pushed through tougher regulation of financial institutions, making it clear people were paying for their sins, and would have a much harder time doing it again. This would have delighted the left and perhaps bought Obama more durable support among independents. Instead, the left thinks he's beholden to investment banks, and much of the public sees no consequences for the financial mess.

Add in some serious budget cuts, and Obama would have positioned himself as a new kind of liberal with the courage to tame Washington and Wall Street, as promised. Under this scenario, Obama might be getting more credit for the economic recovery that appears to be under way. This would have positioned him to win health care reform starting next year — a mighty achievement, and clear vindication against the doubters. Some White House officials said they are skeptical of moving controversial bills in an election year, when lawmakers are often more timid.

White House officials say they never seriously considered a more incremental approach to the year, though they did privately discuss trying to get regulation of the financial sector done right after the stimulus bill. There was too much disagreement among Democrats at the time over how far to go with regulation to proceed.

If the current strategy fails, the same person who got much of the credit for the crisp first 100 days will get some of the blame: White House chief of staff Rahm Emanuel. It was Emanuel who has strongly advocated the big-bang approach, declaring during the transition: "You never want a serious crisis to go to waste. Now, what I mean by that, it's an opportunity to do things you think you could not do."

The confidence of Obama's aides was bolstered by their fresh memory that a similar approach had worked very effectively for then-President George W Bush after the September 11 attacks. With the public on edge, Bush was able to enact restrictive policies under the banner of protecting American soil, and build an entire new department of government that voters otherwise might have opposed. The economic meltdown would be Obama's September 11 — the predicate for sweeping legislation that he wanted to enact anyway.

Just past halftime in his first year, the president has won passage of a long list of bills that the White House points to as proof of their approach. In addition to the stimulus, Obama signed major bills on tobacco, pay equity, children's health insurance, national service and the mortgage rescue.

If he gets health care and either energy or regulation this year, it would be hard to argue the big-bang plan wasn't a success.

Former Rep. Lee Hamilton (D-Ind.), now president and director of the Woodrow Wilson International Center for Scholars, cautions that any verdict on Obama would be "kind of like judging a major surgical operation in the middle of the operation."

With Obama reaching the defining season of his freshman year, Hamilton said the current agenda reminds him of the scale of the Great Society programs Congress was tackling when he came to Congress in 1965. "This president thinks big but I also think he acts pragmatically," Hamilton said. "So many things in a congressional session come together at the last few hours, the last few weeks."

But sometimes they just come undone.

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