Party of “No” Stymies Democratic Party Legislation
On January 29, 2009, the whittled-down and beaten-up Republican minority in the House of Representatives gathered for a strange celebration of defeat. The Democrats had just drubbed them at the polls, seizing the White House and a 79-seat advantage in the House. The House had then capped President Barack Obama’s first week in office by passing his $800 billion Recovery Act, a landmark emergency stimulus bill that doubled as a massive down payment on Obama’s agenda. Even though the economy was in free fall, not one House Republican had voted for the effort to revive it, prompting a wave of punditry about a failed party refusing to help clean up its own mess and dooming itself to irrelevance.
But at the House GOP retreat the next day at a posh resort in the Virginia mountains, there was no woe-is-us vibe. …
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The Republicans were pumped because they saw a path out of the political wilderness. They were convinced that even if Obama kept winning policy battles, they could win the broader messaging war simply by remaining unified and fighting him on everything. Their conference chairman, a then-obscure Indiana conservative named Mike Pence, underscored the point with a clip from Patton, showing the general rallying his troops for war against their Nazi enemy: “We’re going to kick the hell out of him all the time! We’re going to go through him like crap through a goose!”
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… What has distinguished the opposition to Obama is not just the intensity—a GOP congressman shouting “You lie!” during a presidential address, Senate Republican leader Mitch McConnell’s admission that his top priority was limiting Obama to one term—but the consistency. … on just about every issue, from Obamacare to climate to education reforms that conservatives supported until Obama embraced them, Republicans have embraced that strategy.
Unified vitriol against Obama’s legislative agenda, coming from Republican office holders and media bomb-throwers had an immediate destructive effect.
Polls showed a 14-point plunge in public support for the Recovery Act in the week after the House vote. Most economists now believe the stimulus helped avert a depression and jump-start a recovery, but a year after passage, the percentage of Americans who believed it had created any jobs was lower than the percentage who believed Elvis was alive.
… Not one House or Senate Republican backed Obama’s health reforms, even though they looked a lot like Mitt Romney’s reforms in Massachusetts. And the unified GOP opposition forced the White House to cut all kinds of deals to keep all 60 Senate Democrats on board to overcome a filibuster …
… they [the Republicans] also filibustered and voted in lockstep against previously uncontroversial Obama priorities, like extended unemployment benefits, expanded infrastructure spending and small-business tax cuts. Senate Republicans even turned routine judicial nominations into legislative ordeals, filibustering 20 of his district court judges—17 more than had been filibustered under all of his predecessors.
Republican leaders simply did not want their fingerprints on the Obama agenda; as McConnell explained, if Americans thought D.C. politicians were working together, they would credit the president, and if they thought D.C. seemed as ugly and messy as always, they would blame the president. …
The Republican outside game, like the Republican inside game, was all about standing up to Obama. He was blistered every day on Capitol Hill as well as talk radio as a dangerous leftist who wanted to turn the United States into Europe. While Republican congressmen didn’t post photos of the president in Muslim garb on Facebook, or forward racist emails from their uncles about him, or openly question whether he was an American citizen, they didn’t really try to set their base straight, either. And that base was fired up. The Tea Party movement that began to mobilize a few weeks into the Obama era was billed as an anti-tax crusade—even though Obama had just passed $300 billion worth of tax cuts in his stimulus—but the rallies felt a lot like anti-Obama rallies, with angry speeches about tyranny in the White House and crude portraits of the president as the Joker.
The relentless attacks on Obama helped sink his approval rating from the high 60s down to the 40s, where they would remain for most of his presidency. He had run as a “post-partisan” candidate, promising to fix the nastiness and pettiness of Washington, and it was a promise he couldn’t keep. In his first two years in office, he and his Democratic majorities did a lot—the stimulus, Obamacare, sweeping Wall Street reforms, bringing troops home from Iraq—but he failed to convince the public to like what he did. In the 2010 midterms, Americans voted to change his change, giving the Republicans the House in a landslide that Obama described as “a shellacking.” …
Many Republicans believe their just-say-no approach reflected principled resistance to liberal overreach, not cynical partisan nonparticipation, but whatever you call it, it helped restore the GOP House majority much faster than the pundits thought possible. And divided government meant the doom of Obama’s legislative agenda, including a jobs bill, gun control measures and immigration reform. …
… Many of the Tea Party Republicans elected in the midterm wave had campaigned on rolling back the stimulus, repealing Obamacare, and dismantling Wall Street reform—and they expected their leaders to make it happen, even though they didn’t control the White House or the Senate. …
“The second we got the majority back, people started making unrealistic demands,” [Oklahoma Rep. Tom] Cole says. “They thought: Oh, if we just fight harder, if we just shut down the government, if we just use more extreme tactics, the other side will cave.” …
The most prominent example was the 2011 showdown over the debt ceiling, when Republican leaders threatened to let the government default on its obligations if Obama didn’t accept major spending cuts. The idea was to use the full faith and credit of the nation as a hostage to force Obama to pay a policy ransom—possibly even a “Grand Bargain” including entitlement reforms. But some House Republicans truly wanted to shoot the hostage and force Obama into default to make a point about the debt, even though that would have created global chaos. Others refused to vote to raise the debt ceiling—which merely lets the Treasury pay for spending Congress has already authorized—unless Obama agreed to repeal Obamacare. And while Speaker John Boehner tried negotiating with Obama, many of his members had little appetite for any bargain that would make Obama look like a bipartisan statesman. There’s not much incentive to compromise with an adversary after telling your constituents he’s a socialist tyrant intent on destroying America.
The result was a near-catastrophe that helped produce a downgrade of the U.S. government’s credit rating. And while the crisis was averted by a last-minute deal for across-the-board spending cuts known as “the sequester,” the GOP purity caucus was unwilling to claim victory because Obama had won some concessions. … (Grunwald 1-6).
Accomplishments
In mid-January, pollsters for the Washington Post and ABC News asked a representative sampling of Americans the following question: “Obama has been president for about three years. Would you say he has accomplished a great deal during that time, a good amount, not very much, or little or nothing?”
When the poll’s results were released on January 18, even the most seasoned White House staffers, who know the president faces a tough battle for reelection, must have spit up their coffee: more than half the respondents—52 percent—said the president has accomplished “not very much” or “little or nothing.”
… there is an empirically right answer—one chosen by only 12 percent of the poll’s respondents. The answer is that Obama has accomplished “a great deal.”
Measured in sheer legislative tonnage, what Obama got done in his first two years is stunning. Health care reform. The takeover and turnaround of the auto industry. The biggest economic stimulus in history. Sweeping new regulations of Wall Street. A tough new set of consumer protections on the credit card industry. A vast expansion of national service. Net neutrality. The greatest increase in wilderness protection in fifteen years. A revolutionary reform to student aid. Signing the New START treaty with Russia. The ending of “don’t ask, don’t tell.”
Even over the past year, when he was bogged down in budget fights with the Tea Party-controlled GOP House, Obama still managed to squeeze out a few domestic policy victories, including a $1.2 trillion deficit reduction deal and the most sweeping overhaul of food safety laws in more than seventy years. More impressively, on the foreign policy front he ended the war in Iraq, began the drawdown in Afghanistan, helped to oust Gaddafi in Libya and usher out Mubarak in Egypt, orchestrated new military and commercial alliances as a hedge against China, and tightened sanctions against Iran over its nukes.
Oh, and he shifted counterterrorism strategies to target Osama bin Laden and then ordered the risky raid that killed him.
That Obama has done all this while also steering the country out of what might have been a second Great Depression would seem to have made him already, just three years into his first term, a serious candidate for greatness.
And yet a solid majority of Americans nevertheless thinks the president has not accomplished much. Why? There are plenty of possible explanations. The most obvious is the economy. People are measuring Obama’s actions against the actual conditions of their lives and livelihoods, which, over the past three years, have not gotten materially better. He failed miserably at his grandiose promise to change the culture of Washington .... His highest-profile legislative accomplishments were object lessons in the ugly side of compromise. In negotiations, he came off to Democrats as naïvely trusting, and to Republicans as obstinately partisan, leaving the impression that he could have achieved more if only he had been less conciliatory—or more so, depending on your point of view. And for such an obviously gifted orator, he has been surprisingly inept at explaining to average Americans what he’s fighting for or trumpeting what he’s achieved.
In short, when judging Obama’s record so far, conservatives measure him against their fears, liberals against their hopes, and the rest of us against our pocketbooks. But if you measure Obama against other presidents—arguably the more relevant yardstick—a couple of things come to light. Speaking again in terms of sheer tonnage, Obama has gotten more done than any president since LBJ. But the effects of some of those achievements have yet to be felt by most Americans, often by design. Here, too, Obama is in good historical company.
… a number of Obama’s biggest accomplishments function, like FDR’s, with a built-in delay. Some are structured to have modest effects now but major ones later. Others emerged in a crimped and compromised form that, if history is a guide, may well be filled out and strengthened down the road. Still others are quite impressive now but create potential for even greater change in the future. ...
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Let’s begin with the policies that have prompted the most disappointment from the left and anger from the right: Obama’s big moves on the economy. The most visible aspect of Obama’s agenda in this arena was the American Recovery Act, better known as the stimulus. Almost no one has a good word to say about it these days. Voters have soured on it. Obama made no mention of it in his State of the Union address. Liberals complain that it was too heavily weighted with not-very-stimulatory tax cuts meant to lure GOP votes (which it didn’t), that it should have been even bigger (true, though it was bigger than the one the Democratic-controlled House proposed), and that a significantly bigger one could have passed Congress (dubious). Conservatives claim it didn’t increase jobs or help the economy at all.
But most reputable economists say it did. According to the Congressional Budget Office, the stimulus added anywhere from 500,000 to 3.3 million jobs and boosted GDP by between 1 and 4.5 percent. Indeed, within weeks of the stimulus going into effect, unemployment claims began to subside. Twelve months later, the private sector began producing more jobs than it was losing, and it has continued to do so for twenty-three straight months, creating a total of 3.7 million private-sector jobs. On the first key test—whether it helped the economy when the economy needed it most— the stimulus passed. And if the current recovery continues to pick up steam, then the stimulus will be remembered as having helped lead America out of the Great Recession.
But the potential significance of the stimulus may go even beyond that. First off, thanks to innovative management, the administration has been able to spend $787 billion with minimal fraud. (By comparison, FDR’s early New Deal spending was so fraught with waste and abuse that the term “boondoggle” arose to describe it.) Not only that, but the way the administration has chosen which projects to fund has itself been revolutionary. Instead of spending all the money in the usual manner—by formula, with each state and congressional district getting its “fair share”—the administration used a sizeable portion of the stimulus to create a dozen or more giant competitive grant programs. Potential recipients, be they state and local governments, nonprofits, or corporations, had to vie for the money by proposing their own entrepreneurial strategies for meeting federal goals, as well as procedures to measure the results of their efforts.
The best known of these is Race to the Top, the much praised $4.35 billion Education Department grant program. It is one of the few policies of this administration praised by left and right—and yet almost no one mentions that it was part of the stimulus bill. …
Another major (and much-reviled) aspect of Obama’s economic legacy is how his team handled the meltdown of the financial sector. This is another achievement he made no mention of in his State of the Union address—and no wonder, because it’s complex, still unfolding, and involves the rescue of bankers. But it’s worth slowing down here to remember the crisis as Obama inherited it. As you will recall, the actual bank “bailout” took place in the fall of 2008, when the Bush administration created the Troubled Asset Relief Program, or TARP. By injecting more than $300 billion into hundreds of banks, and especially the nation’s biggest, TARP bought the economy some breathing room and gave the incoming administration some resources— another $350 billion in unspent TARP funds—to work with. But with consumers increasingly unable to make their mortgage and credit card payments—the economy was shedding upward of 800,000 jobs the month Obama was inaugurated—losses at the big banks were mounting faster than Washington could force-feed dollars into them, and no one really knew what they were carrying on their balance sheets. Any number of institutions looked like they could collapse, and that extra $350 billion was not enough to stabilize the system and pay for other crucial emergency programs, like mitigating foreclosures.
The advice the administration was getting from economists like Joseph Stiglitz, who had seen the crisis coming years before, was to use the moment to completely reshape the financial sector: nationalize the biggest, most troubled banks; toss out their management; break them up into smaller banks; have the government strip out and sell off the “toxic” assets on their books; downsize executive salaries and bonuses; and, in general, shrink the size of Wall Street, the better to limit its baleful influence on the rest of the economy.
… Timothy Geithner’s Treasury Department crafted a much more targeted intervention, aimed at stabilizing the financial markets and getting the economy back on track at the lowest possible cost to government. Rather than have the taxpayers assume the risky and expensive burden of taking over the banks—an expense that Congress, having already approved TARP and the stimulus, was in no mood to authorize—Geithner’s plan was to convince investors to come in and recapitalize them. His plan had three main parts. First, the Treasury, working with the Fed and other agencies, ran “stress tests” of the banks to determine the fragility of their books and how much more capital they’d need to be able to survive and lend in an even more dire economic scenario than was expected at the time. Second, it gave banks six months to raise that amount of capital from private investors, and said that, if they failed, Treasury would use taxpayer dollars to buy ownership shares of the banks at a preset price, effectively establishing a floor for private investors. Third, it created a fund, with both public and private dollars, to buy the toxic assets on the banks’ books, thereby giving some assurance that there would be a market for those assets.
The politics of the plan were dreadful. It looked like more mollycoddling of Wall Street. But, as Joshua Green noted in the Atlantic, it had the desired effect. Private money, $140 billion of it, flooded into the nineteen biggest banks; the lending markets unfroze; and, with the help of low interest rates from the Fed, the banks paid back the TARP funds, with interest. In 2008, the International Monetary Fund studied past financial crises in forty-two countries and found that their governments spent, on average, 13.3 percent of GDP to resolve them. By that measure, it would have cost the U.S. government $1.9 trillion. The Obama plan got the banks back on their feet at essentially zero cost to the government, and in historically near-record time. Let that sink in.
In addition to resolving the immediate crisis, the administration tried to insure against a repeat of it by issuing a plan to expand federal regulation of the financial markets, a plan that ultimately became the Wall Street Reform and Consumer Protection Act, otherwise known as Dodd-Frank. The new law, which passed with almost no GOP votes, has been scathingly criticized since it first appeared in the House— by conservatives for being a big-government power grab and by liberals and various academic experts for being too weak.
But as Michael Konczal of the Roosevelt Institute explains, the new law parallels and expands upon the great achievements of New Deal financial regulation. Much as the Securities Act of 1933 and the Securities Exchange Act of 1934 mandated transparency in the securities markets and created the SEC to punish fraud, Dodd-Frank creates a new Consumer Financial Protection Bureau (CFPB) to do the same for everything from mortgages to credit cards. The Securities Exchange Act forced stock trading onto exchanges and mandated that traders have sufficient collateral. Similarly, Dodd-Frank pushes financial derivatives into clearinghouses and exchanges. The 1933 Glass-Steagall Act forced the separation of commercial banks from the more speculative activities of investment banks. The new so-called Volcker Rule in Dodd-Frank limits the ability of banks to trade securities for the firm’s own profit. Glass-Steagall also created the FDIC to monitor commercial banks and take them over if they get into financial trouble. Dodd-Frank gives the FDIC “resolution authority” over the “too big to fail” financial behemoths so that they too can be monitored and taken over if necessary.
At each stage as Dodd-Frank has moved through the legislative process, from House to Senate and now to the agency level for implementation, liberals have sounded the alarm that the insufficiently stringent law was liable to get progressively weaker as industry lobbyists jam it full of caveats and exemptions. Yet while the law does now include its fair share of loopholes (especially in the Volcker Rule), what’s surprising is that the measure has in general gotten tougher, not weaker, over time—often at the behest of lawmakers who wanted stronger measures than did Geithner. …
Washington narratives tend to get set early and resist new anomalous facts. So it is with the financial crisis. The initial take was that Dodd-Frank is weak tea and Obama caved to Wall Street. This view has persisted despite accumulating evidence to the contrary. …
… The main danger to the economy was interconnection, not raw size.” With the capital requirements of the Collins amendment, the Volcker Rule, and the forcing of derivatives into clearinghouses, Dodd-Frank goes a long way toward dealing with the “interconnection” problem. The law’s “resolution authority” also gives regulators the ability to spot overly risky behavior by big banks early and to shut them down if they get into trouble. And the behemoths now have higher capital requirements than do smaller banks, another hedge against risk and an incentive for business to move from the former to the latter.
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… But if we get through the next decade or two without another financial meltdown, and Wall Street’s unhealthy influence over the economy abates, then Obama will be credited with not only having gotten us out of the financial crisis in the short run but also having crafted an effective new set of rules to reduce the chances of it happening again (Glastris 11-20).
Works cited:
Glastris, Paul, “The Incomplete Greatness of Barack Obama.” Washington Monthly, March/April 2012. Web. https://washingtonmonthly.com/magazine/marchapril-2012/the-incomplete-greatness-of-barack-obama-2/
Grunwald, Michael, “The Victory of ‘No.’” Politico. December 4, 2016. Web. https://www.politico.com/magazine/story/2016/12/republican-party-obstructionism-victory-trump-214498
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