For Obama, A Chance to Push Big Changes
Amid the almost surreal numbers that describe the nation's financial crisis, President-elect Barack Obama and his incoming team are positioned to take advantage of a changed political environment and push for programs and reforms that only a few months ago might have been unimaginable.
Since the lame-duck Bush administration and Congress began pumping out hundreds of billions of dollars to prop up one wobbly financial institution after another, many political analysts say the old rules of fiscal debate are out the window. Talk about balancing budgets and pay-as-you-go for new programs now sound like quaint artifacts of the campaign. The projected budget deficit this fiscal year may top $1 trillion - more than double the record - and the national debt has shot up a breathtaking $15 billion per day in the past 10 weeks, to $10.7 trillion and counting, according to the US Treasury's Bureau of the Public Debt.
Mounting job losses in a braking economy have provided an opening for the Democratic president-elect, who will enjoy an expanded partisan majority in both chambers of Congress, to join the ranks of previous presidents who have undertaken major initiatives in bad times. As Rahm Emanuel, the Chicago congressman who will be chief of staff in Obama's White House said recently, "Rule one: Never allow a crisis to go to waste . . . They are opportunities to do big things."
Obama himself has said that priority one after he is sworn in on Jan. 20 will be a massive and costly economic stimulus package aimed at job creation - and that its components will flow from his long-term policy goals.
"Everything that he talked about during the campaign that can be seen as stimulus is going to be in that package," predicted Paul C. Light, a professor at New York University's graduate school of public service. "It will be one of the heaviest pieces of legislation passed by Congress in the last 20 years, and I mean heavy in terms of actual weight and page numbers."
Light predicted that the stimulus package will include such initiatives as Obama's campaign vow to expand national service programs like AmeriCorps by 175,000 relatively low-paying jobs as part of his goal of creating or saving 2.5 million jobs in the first two years of his administration.
Obama has also said his economic team will identify waste and programs that don't work to find savings to offset some of the increases. Light, who has chronicled the growth of the federal bureaucracy under Bush, said Obama may be able to achieve his goal of cutting $40 billion in contractor costs, a modest sum in light of the skyrocketing deficit. By Light's calculations, the Bush administration added 3.2 million contract employees at a cost of $250 billion, mostly for national defense and antiterrorism.
But Light said Obama will not be able to duplicate the Clinton administration's reduction of the federal payroll by almost 400,000 civilian employees because most of those cuts resulted from defense cuts and widespread military base closings after the end of the Cold War.
Stephen J. Wayne, professor of American government at Georgetown University, said the political and economic climate should heighten Obama's clout.
"Presidents have more power during crises when they are elected to fix something," Wayne said. "He should be able to push through a variety of programs when he is the strongest and the fear of not backing him is the greatest. . . . There is a crisis that demands action, and Congress has a lower public approval rating than President Bush, which says something."
Alice M. Rivlin, a Brookings Institution fellow who served as director of the Office of Management and Budget in the first Clinton administration, said Obama should seize the opportunity in this climate to harness the price-setting power of Medicare's single-payer model to increase efficiency and reduce the cost of healthcare, and to insure Social Security's long-term solvency.
"The thing that has been holding up fixing Social Security has been the commitment of Republicans to individual accounts, and nobody is going to advocate that now," after such volatility in the stock market, Rivlin said. "Finding a compromise should be much more doable, and they ought to just do it."
But Bradley A. Smith, a professor at the Capital University Law School, questioned the degree to which Obama's election represents a specific mandate.
"I think what the country was really voting for was a return to normalcy after eight years of a very high-stress presidency," said Smith, who advised Republican Mitt Romney's presidential campaign. "Obama would be making a mistake to overreach." He said Obama's proposals should be judged independent of the fiscal meltdown. "I'm not sure nationalizing a huge part of the healthcare system has anything to do with the mortgage crisis."
Marie Gottschalk, professor of political science at the University of Pennsylvania, said Obama fits the profile of a president who could put his stamp on history in the manner of other famous presidents whose predecessors were widely perceived to be failures. But, perhaps because Obama is the first black president, he appears to be treading cautiously, trying to prove himself to the broad political establishment, she said.
"He should be in a great place to strike out because his predecessor and the Republican Party are delegitimized, and the country seems ready to strike out in a different direction," Gottschalk said. "The difference is, you have an African-American who has to establish his credentials with the establishment, and that may be constraining him."
Some of the most profound policy changes in recent American history have been achieved by presidents who were elected in times of great economic stress as voters rejected their predecessors. Franklin D. Roosevelt, who succeeded Herbert Hoover, pushed through the New Deal, with its jobs programs, Social Security, and regulation of the stock market during the Great Depression in the 1930s.
A half-century later, following a period of high inflation and stagnant growth under Jimmy Carter, Ronald Reagan did the same with deep tax cuts, deregulation, tight monetary policies, and a military buildup.
Historian Doris Kearns Goodwin, who has written biographies of FDR and Lincoln, said, "What happens in times of crisis is the president can mobilize the sentiment of the country in a way that goes over the natural competing interests in Congress and the smaller obstacles in the way of change," she said. "It allows you to take much bigger steps."