Maybe he can't

During his first year in office Barack Obama has tried hard to implement a reform agenda in areas like healthcare, foreign policy and financial regulation. But the gloomy state of the economy continues to overshadow his efforts.

During the transition period in late 2008 when Barack Obama was preparing to take office, Rahm Emanuel gave a bravado talk to the victorious Democratic congressional caucus. The future White House chief of staff predicted that Obama’s victory would be followed by success in the midterm elections – a time when the president’s party usually gets a drubbing. The 2010 midterms, he assured his Democratic colleagues, would be more like 1934 than 1994.

In 1934, two years after taking the White House, Franklin Roosevelt helped engineer the beginning of more than a generation’s worth of Democratic domination of Congress. In contrast, in 1994 Bill Clinton was humiliated by Newt Gingrich’s new model Republicans, which took control of the House of Representatives for the first time in 40 years.

By implication, Emanuel was proclaiming that Obama’s election had ushered in the start of a New Deal-style realignment – the long conservative era was at an end. Furthermore, Emanuel argued that a moment of great crisis was also an opportunity. Democrats should step boldly into the progressive future with an ambitious legislative programme. "You never want a serious crisis to go to waste,” he told a conference a few days later.

In both his prognosis and his prescription, Emanuel was expressing widely held views. One year into Obama’s first term, the wisdom of each is being questioned. The emergence of an angry right-wing "tea party” movement, which filled the space vacated by an absentee Republican leadership in Washington, has taken people by surprise. Far from being a meteorite, the anti-tax movement has grown stronger, capturing the sympathy or support of up to 40 per cent of voters, according to polls.

Some Democrats, probably correctly, see the tea party movement as a blind electoral alley for a Republican party still mired in the anger and denial stages of loss. But beyond their inchoate, and sometimes offensive, cultural paranoia, "tea baggers” have arguably also caught the momentum of a broader backlash against the growing role of federal government and the nexus between a lavishly subsidised Wall Street and policy makers in Washington.

"A year ago I accepted Rahm Emanuel’s argument that there had been an underlying change in American politics,” says Vin Weber, who was a prominent conservative backer of George W. Bush. "Now I think the picture looks much less clear.” David Gergen, a former adviser to both Republican and Democratic presidents, agrees: "One of the lessons of Obama’s first year is that America is suffering from strong anxiety and is in no mood to see a sharp move in a liberal direction.”

Emanuel’s support for a "big bang” approach to the legislative agenda – mirroring to a lesser degree the sweeping reforms FDR initiated in his first spell in office – is also now questioned. Some time in the next few weeks, Obama is likely to be the first president in more than 40 years to achieve serious
healthcare reform. Passage of the 10-year, roughly $US900 billion bill will be a historic moment in which the federal government brings most of America’s uninsured in from the cold.

Yet the prospect has left the electorate nonplussed – even mildly hostile, according to some polls. With the unemployment rate in double digits, there are more pressing anxieties on voters’ minds. Following a year of unedifying horse-trading over healthcare, Obama intends to devote the bulk of his second year to jobs. Some people believe it ought to have been the other way round. "I think Obama underestimated how the economy would dominate everything,” says Gergen. "He might have been better off flipping year one and two.”

On foreign policy, too, there has been a gradual "post-euphoric” deflation of expectations, most notably over how much Obama can accomplish on the back of his popularity around the world. He has also been dealt a welter of unprovoked reality checks. During the election campaign, when Obama often quoted John F.Kennedy’s line, "if you want to make peace, you don’t talk to your friends”, Hillary Clinton mocked her rival’s pledge to talk to the world’s worst dictators.

Aside from a brush with Venezuela’s Hugo Chvez, Obama has yet to find credible opportunities to engage the world’s most threatening regimes – Iran and North Korea most importantly. Towards both, Obama’s approach represents a degree of continuity with the final stages of Bush’s period in office: tentative overtures repeatedly spurned.

Yet he cannot be accused of not having tried. Obama has been unfortunate on Iran, for example, where Mahmoud Ahmadi-Nejad has increased his stranglehold on power since last June’s disputed election. Conservative critics say Iran’s growing intransigence proves the failure of Obama’s strategy of engagement. But the reality is more complex.

"We are clearly moving from the engagement phase with Iran to a phase of sanctions,” says Strobe Talbott, head of the Brookings Institution, a Washington think-tank. "But having tried engagement and been rebuffed by Iran, Obama is now in a far stronger position to persuade Russia and China of the case for sanctions. It is completely wrong to say engagement has failed.”

On Christmas day, Obama was dealt another unwelcome reality check with the botched attempt by a young Nigerian to blow up an airliner headed for Detroit. Although the president won plaudits for his calm response, it served as a reminder of how easily consumed he could be were such an attempt to succeed in the future. "Detroit reminded us that Obama is one bomb away from a failed presidency,” says Dick Gephardt, a former Democratic majority leader. "It may not be fair but that is the reality.”

Obama’s approach to the financial meltdown has also shown surprising continuity with that of Bush, who pushed through the first $US350 billion in bank rescue funds and began the largely unconditional bail-out of Wall Street. The sense of continuity was underlined by the fact that Obama selected Tim Geithner to replace Hank Paulson as Treasury secretary. As chairman of the New York Federal Reserve, Geithner had worked closely with Paulson when the crisis unfolded.

In spite of the ugly side-effect of further enriching the Wall Street authors of the meltdown, the Paulson-Geithner approach did succeed in averting economic Armageddon. But Obama has received little credit from an electorate that long ago lost trust in public institutions (an indicator that has not budged since he took office). Instead, voters on right and left express disenchantment at the growing gap between Wall Street, which is booming again, and Main Street, for which the recovery is still an abstraction.

Very tellingly, in an All State/National Journal poll on Thursday, the proportion of Americans who say their country is on the "wrong track” has grown from 42 per cent last April, when the recession was drawing to a close, to 55 per cent this month – half a year into the apparent recovery.

The gloom is felt across the spectrum. In the poll, an astonishing 31 per cent of respondents say they have either lost their job or been unemployed for a long stretch within the last year. Almost half said they believed Obama’s actions had failed to end the recession.

"If you go out of Washington DC it is shocking how many people confuse President Obama’s fiscal stimulus [the $US787 billion economic package he pushed through a year ago] with the Tarp [troubled asset relief programme] bail-out for Wall Street,” says Dean Baker, president of the liberal Centre for Economic and Policy Research in Washington. "They are two completely different things. But people are confused and have the impression there’s a lot of money being pumped out of Washington and they are seeing none of it.”

Again, voters are giving Obama too little credit for a fiscal injection that undoubtedly helped to cushion what could have been an even deeper recession. But perception drives politics – and Obama has proved surprisingly flat-footed at winning the public relations battle on the economy. His fairly tepid package of Wall Street reforms, which only elliptically address the "too big to fail” problem, has reinforced the disillusion.

"Bill Clinton once said that in politics it was better to be strong and wrong than weak and right,” says Andy Stern, head of the Service Employees International Union, who according to White House logs has visited the president more times than any other outsider. "I won’t go so far as to say that President Obama has been weak and wrong on Wall Street re-regulation. But we have an historic opportunity to push for more far-reaching reforms. And that window is now closing.”

Whether it is recalcitrant foes – from obstructionist Republicans at home and America’s determined rivals and enemies abroad – or recalcitrant trends (most notably the economy and mounting public debt) Obama’s first year in office has offered a sobering tutorial in the limits of presidential power.

It has also served as a reminder not to take campaign promises too literally. Obama swept to power promising change – particularly to the way politics is conducted in Washington. He also promised a revitalising diplomatic agenda. Both have bumped up against familiar constraints: the first to the limits of a president’s domestic power, the second to the reality of America’s waning clout in the world.

Whatever else can be said of Obama’s mostly very competent performance, there is little doubt it has failed to redeem the excitement he generated on the campaign trail. Indeed, he has taken America in some familiar-seeming directions. His 30,000 troop surge for Afghanistan may be very different from Bush’s actions in Iraq. But, much like Tarp and the stimulus, the two wars have begun to blur in many people’s minds.

Even from this distance, however, the odds are that Obama will win a second term in 2012. The Republicans are a deeply damaged brand and the president promises a relentless focus on the economy between now and then. But it will be a battle-hardened and more realistic Barack Obama who will take to the hustings next time around: an incumbent who will have to campaign on his record rather than his ability to inspire.

"It isn’t so much ‘yes we can’ any more as ‘we are doing all that we can’, says one prominent liberal supporter of Obama. "And I think on most fronts, he is doing all that he can.”

Obama's battles with the Senate

Ronald Reagan once said that politics was the second oldest profession. The behaviour of the US Senate in the last year has provided ample illustration of his observation about its dubious nature.

Unlike the House of Representatives, where a simple majority is required, in practice the 100-seat Senate increasingly requires a super-majority of 60 votes – the precise size of today’s Democratic caucus.

Rather than guaranteeing a solid bloc for Obama’s agenda, that 60-seat threshold has emboldened many Democratic senators to behave as though they can be king for a day. Obama’s healthcare bill has been the principal, although not the only, casualty of the resulting feeding frenzy.

"Instead of being a band of brothers, the Democrats in the Senate have turned into a circular firing squad,” says Andy Stern, a prominent trade unionist. "The US Senate is supposed to be the world’s most deliberative body. But the last year has made it look like a third-rate institution of squabbling, small-time politicians.”

Some pundits blame Obama for having failed to send the Senate a precise blueprint of the bill he wished to see enacted. That, they say, gave the Senate leeway to allow special interests to pick and choose what they wanted. However, given the nature of the Senate and the diverse interests of the Democratic coalition, it seems unlikely that a more prescriptive Obama would have made a big difference.

The spectacle has verged on the comic. In November Mary Landrieu held the healthcare bill hostage until Harry Reid, the Senate majority leader, inserted a $US300 million) sweetener for her home state of Louisiana. Dubbed the "Louisiana purchase” after Thomas Jefferson’s $US15 million acquisition of that territory from France in 1803, Ms Landrieu’s horse-trading set a tone followed by others.

Shortly before Christmas, Ben Nelson gained a tidy $US100 million for Nebraska under a section of the bill entitled "equitable treatment for certain states”. "Well, you know, look, I didn’t ask for a special favour here,” he said.

Meanwhile, Joe Lieberman of Connecticut won himself only notoriety when he threatened to torpedo the bill over the inclusion of an already toothless public insurance option. Its residue was duly removed.

Worse for Obama, his party is almost certain to lose at least three or four seats in the Senate in November. That would further empower moderate Republicans such as Susan Collins and Olympia Snowe of Maine, both of whom are also highly skilled at extracting parochial concessions.


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