When President Obama returns from Asia he will face a decision on future policy in Afghanistan. He also must consider how, and in what form, health-care legislation can be passed — ideally, from his standpoint, by the end of calendar 2009. Yet, given its upcoming Thanksgiving and Christmas recesses, Congress will be in session only a few working days before the end of 2009.
Both Obama and Democrats in Congress face a difficult political environment. Although Obama's personal approval ratings are 53 or 54 percent in most polls, his policies, across the board, are receiving less than 50 percent approval. Independent voters, in particular, have fallen away, spooked mainly by rising federal budget deficits. Moderate Democratic congressional incumbents, who depend for their elections on independent voters, will embrace the Obama agenda only to the degree that it does not seem to endanger their reelections in 2010.
How is Obama doing? His first year could be compared to those of other presidents, many of whom had uneven first years in office. But other comparisons come to mind as well. One is to the HBO series, Entourage, in which a young pop star, accompanied by his hometown crew, has ups and downs in an unforgiving Hollywood environment. Another is to that of a talented rookie baseball slugger, rushed to the major leagues after a sensational spring training, who is forced to adjust quickly to the curve balls, changeups, and wily tactics of veteran big-league pitchers. Like them, Obama has found that a promising start does not necessarily translate to following success. Yet his success is still possible. What follows is an overview of the major issues and prospects for success.
The financial/economic realities. Too-big-to-fail financial houses have been rescued by taxpayer dollars. Huge public sums have been allocated to the auto and housing industries. We have avoided a crash. But, down the food chain, smaller banks, small business, ordinary investors, working taxpayers, homeowners, retirees, and millions of unemployed and underemployed citizens are angry and in pain.
The official unemployment rate is above 10 percent, with the number hitting 17 percent if you include those no longer looking for work or working only a few part-time hours. Millions have fallen below the official poverty line and/or are receiving insufficient nutrition for daily sustenance. These on-the-street realities far outweigh politically the macro-numbers pointing toward a gradual economic recovery, with gradually rising employment, in 2010.
Businesses have become more efficient during the downturn. Productivity has risen as more work is being done with fewer employees. That means many of those laid off over the past 18 months are unlikely to be rehired. Greater productivity is good news for U.S. competitiveness; it is bad news for those who will remain unemployed when the upturn comes.
Fed Chair Ben Bernanke, by far the most credible voice regarding the outlook, predicts a slow recovery in 2010. Obama, and congressional Democrats facing reelection campaigns, will point in coming months to rising growth rates and the official end of recession. Voters will pay greater attention to unemployment numbers and their own personal situations. They also will pay attention to deficits projected to be above $1 trillion annually over the next several years — even without passage of a prospectively expensive health-care package.
Pending domestic business. President Franklin Roosevelt, in the early months of his term, devoted all his energies to the financial/economic crisis; his principal domestic legislation, Social Security, was not enacted until 1935. Obama, however, has tried to deal with economic crisis, involving unprecedented trillions of public dollars, while simultaneously pursuing expensive legislation remaking the health sector. The health debate has overwhelmed all else in the Congress, pushing aside even financial-reform legislation.
A consolidated health-reform bill has narrowly passed the House of Representatives, but only after House Speaker Nancy Pelosi ladled out goodies to on-the-fence moderate Democrats and yielded to pressure from Catholic Bishops to ban use of federal health-care money for elective abortions. The House version provides for a so-called "public option," a publicly run insurance plan to compete with private health-insurance plans.
The Senate version was not expected to include the public option. But, at last minute, Senate Majority Leader Harry Reid added it to the bill he intends to bring to a floor vote. (Reid's 2010 reelection in Nevada is threatened; he needs labor-union supporters of a public option to help rescue him). Trouble is, a bill with a public option may not pass the Senate. And there is the added complicating factor of the abortion provision added on the House side. Some of the money to pay for the legislation is slated to come from present Medicare spending, alarming senior citizens.
You catch the drift. It will take an all-out, no-holds-barred effort by Obama, Pelosi, Reid, and other ranking congressional Democrats to pass a bill acceptable to both houses. The struggle is entirely within the Democratic Party. Republicans have opted out, mainly on the basis of the legislation's cost and the absence of malpractice reform.
The longer the delay in a Senate vote and, later, a House-Senate conference to agree on a final bill, the less a health package's chances of enactment. Years from now historians may credit Obama with managing a relatively swift recovery from a serious, inherited financial/economic crisis. But, right now, he will be charged with failure if he does not sign a health-care bill in January or February.
Should Obama have tried for health care legislation in this environment? Should he have left its drafting to congressional Democrats rather than taking charge of the effort himself? Those questions will plague him if the effort fails. He cannot let it fail.
Another cost from his decision to push for health-care reform: Congress will be exhausted following the health-care struggle and unlikely to deal definitively with cap-and-trade legislation or even financial-reform legislation — although the latter should be considered crucial in the wake of the recent crisis. At any rate, once health legislation is done, all energies will be devoted to 2010 campaigning. The remaining Obama domestic agenda will be put on hold.
Foreign Policy. Another major 2010 issue will be the continuing struggle with Al Qaida and the Taliban in both Pakistan and Afghanistan. Obama has called the Afghan involvement necessary. Yet, now, he faces the reality that its success could take years, many billions of dollars, and several hundred thousands of troops to sustain. He is now considering options calling for addition of some 20,000-40,000 troops to our Afghan force. Those would not be nearly enough to stabilize the country, provide security in populated areas, and still fight the Taliban in border areas.
Nuclear-armed Pakistan is the main game; it cannot be allowed to fall into hands of Islamic extremists. But, Obama is hearing, the Taliban and Al Qaida will find easy refuge in Afghanistan for continuing operations in Pakistan if the U.S. opts out of Afghanistan. There is no good option for Obama, or for the country. Over time, it might be possible to buy off all but the most recalcitrant Afghan Taliban. But that is later, not now.
In meantime, Obama's first year is providing him with evidence that, although President George W. Bush irritated allies with what they saw as a unilateralist approach, Obama's appeals to goodwill and reason are not making a difference in addressing the Middle East question or in dealing with states such as Iran and North Korea. Nation states have their interests. They will pursue them. China aspires to great-power status and regional dominance. North Korea and Iran want nuclear weapons to guarantee their security and provide leverage on other issues. The Middle East may be a permanent tragedy. Post-Communist Russia, it turns out, has regional and global ambitions just as its Soviet predecessor did. The need for hard-headed realpolitik has not disappeared.
The Obama team. Obama himself clearly possesses the intellectual wherewithal and powers of public persuasion to lead the country. But his rookie year has been, well, a rookie year.
The team around him is mixed. Defense Secretary Bob Gates and Education Secretary Arne Duncan are strong performers. Secretary of State Hillary Clinton is tough and determined but, as Obama, still learning. Treasury Secretary Tim Geithner and White House economic czar Larry Summers have lived too long among the Masters of the Universe at the too-big-to-fail Wall Street institutions and tend to accept their terms of reference. The Fed's Bernanke has outshone them and been more credible. Attorney General Eric Holder appears headed for serious trouble with his decision to try Al Qaida terrorists in New York federal court rather than before military tribunals — as Presidents Lincoln and Franklin Roosevelt did in similar circumstance. The remainder of the Obama Cabinet is undistinguished, mainly chosen for ethnic, gender, racial, and regional balance reasons, along with a capacity to follow White House orders.
Thus far the Obama White House has operated in a curious fashion. Political decisions are closely and tightly held by chief of staff Rahm Emanuel and adviser David Axelrod on the president's behalf. Policy is led not by cabinet members but by White House "czars," unconfirmed by Congress, who largely preempt the Cabinet members' prerogatives. Yet the content of domestic policy — the original stimulus package, health-care reform, financial reform, and cap-and-trade legislation — has largely been left in the hands of Democratic congressional committee chairs. Obama himself has intervened in the process only after the policy parameters already have been set on the Hill.
As Obama learns that his own fortunes, as well as the fate of domestic proposals, hinge on the content of such legislation, he is likely in 2010 to try to assert greater personal control of his agenda. And, reading the opinion surveys indicating rising public concern about deficit spending, he also is quite likely to shift gears and present himself not as the Spending Obama but as the Saving Obama. That will be quite a shift in message. I expect it to get a tryout in his 2010 State of the Union message.
Bottom line. Stuck with a tough economy and financial situation, Obama made it up as he went along in 2009, doing what was thought necessary to keep the economy afloat. He also launched ambitious domestic initiatives that were expensive and risky. He will try, now, to make something happen with health-care legislation. Then, in 2010, he will begin doing what he can about the red ink he began accumulating in 2009.
The grade at the administration's one-quarter mark: Incomplete.
