Obama’s Future Agenda

William A. Galston
Bill Galston
William A. Galston Ezra K. Zilkha Chair and Senior Fellow - Governance Studies

April 27, 2009

Every modern U.S. president has struggled to maintain control of the nation’s agenda. After his first 100 days, it has become clear that this task may prove especially challenging for Barack Obama, in part because of his transformative ambition, but also because of the daunting complexity of the problems he faces, at home and abroad. This is not to say that he has gotten off to a weak start. On the contrary: he has conveyed mastery of substance, strength of purpose, and equanimity under pressure, impressing both the American people and foreign leaders. It is to say that the next nine months are likely to prove more difficult than the first three, because it is easier to broach issues than to resolve them.

Let me begin with domestic matters.

From the beginning of his campaign in 2007, Obama offered a center-left program of expanded public power in health care, energy and the environment, education, infrastructure and more. In the months immediately preceding the election, however, mounting pressures yielded a financial crisis of global reach, followed swiftly by an abrupt economic downturn.

Obama assumed the presidency with two agendas—the agenda shaped by his campaign and the agenda forged by events. Many commentators believed that he would be forced, or at least well advised, to defer the former until he had implemented the latter. The new president disagreed, arguing that short-term economic recovery and long-term economic renewal were inextricably linked. He has wagered his presidency on the proposition that the U.S. budget and political system can simultaneously absorb an economic stimulus, bailouts of financial institutions, the housing sector, and the automobile industry, comprehensive regulatory reform . . . and a social democratic program of a scope not seen since the days of Lyndon Johnson, perhaps even Franklin Roosevelt.

Not surprisingly, his effort to expand the size and reach of government has proved controversial. Despite his campaign promise to overcome a generation of partisan bitterness, he has quickly become a divisive figure. While his overall public support remains robust, the gap between the attitudes of Democrats and Republicans toward his presidency is wider than for any previous president at this early stage. Perhaps there was no way of avoiding this without sacrificing the substance of his agenda. Nonetheless, surveys show that the American people have noticed and are disappointed. If Obama’s economic and social programs show results, this won’t matter very much. If results are slow to come, however, he could find himself politically weakened by next year.

“Uncharted waters” may be the cliché du jour, but it captures the widespread sense that America is trying to navigate without maps or familiar landmarks. The governing assumptions of the past three decades have been discredited. Markets are not always self-correcting; financial innovation does not always enhance, nor regulations always impede, efficiency and growth. But diminished faith in markets does not necessarily mean enhanced faith in government, at least in the United States. Shortly before Barack Obama took the oath of office, Americans’ trust in their national institutions reached the lowest level ever recorded, and there is little evidence that it has improved since then. A key question is whether the public will support, and the Congress will enact, a program that relies so heavily on the capacity of the national government to serve as an honorable and effective instrument of national purpose.

This is in part a question of fiscal capacity. Estimates of budget deficits averaging nearly $1 trillion each year for the next decade have sent shock waves reverberating around the world. But success depends as well on Obama’s ability to manage his agenda, as it does for every president determined to make more the incremental change. Consider the judgment of Erwin C. Hargrove, a respected scholar of the presidency, rendered after Ronald Reagan’s first 100 days: “Reagan has demonstrated in a way that Jimmy Carter never did, that he understands how to be President. He knows that a president can deal with only a relatively small number of issues at a time.” Hargrove might have added that the same is true of Congress, a fact every president must keep firmly in mind.

A false choice, the supporters of the current administration’s approach might retort: The relevant model is FDR, not Reagan. The world economy is the worse since the Great Depression, the United States is heading toward its grimmest year in generations, and so we need bold action on a broad front.

But consider how FDR governed. Although he assumed office with nearly unchecked power—in 1933, Democrats held majorities of 313 in the House and 60 in the Senate—he was careful to focus his early domestic policy almost exclusively on the economic emergency. Believing that the banking crisis was at the heart of the crisis of confidence, he declared a banking holiday within two days of taking office. Four days later, on March 9, he introduced the Emergency Banking Act, which Congress enacted the same day.

Roosevelt delayed most of the structural reforms that did not bear directly on the economic emergency. For example, he did not even propose a commission to consider social insurance until June 1934. Social Security legislation was introduced a full six months later, in January 1935, and was not signed into law until August of that year. While he was more sensitive than previous presidents to the links among seemingly disparate issues, these interconnections in his view did not warrant trying to move on all fronts at once. The people and the Congress had to be brought along with an agenda and a narrative that they could understand. FDR never believed that his capacity to legislate would wane after his first year in office. On the contrary, he used early momentum to build popular support, yielding further congressional gains in 1934 and a massive landslide in 1936.

There is another objection to the “2009 = 1933” thesis: current circumstances in the United States do not approach the gravity of the situation FDR faced when he took office. To date, GDP has fallen at an annual rate of about 6 percent from its 2008 peak; by 1933, GDP had fallen nearly 40 percent from the prior four years. Unemployment is now 8.5 percent, up from 4.9 percent a year ago; by early 1933, unemployment was 25 percent, including 37 percent outside the agricultural sector.

Today the banking system is in deep trouble, but at the start of the New Deal it was much worse. As FDR took office on March 4, 1933, all 12 Federal Reserve Banks were closed, and banks in 37 states had either limited withdrawals or shut their doors. The American people are not prepared to give the president and his party the degree of deference that Roosevelt and the Democratic Congress enjoyed at the start of the New Deal—all the more reason for Obama to distinguish between short- and long-term measures at least as carefully as FDR did.

The budget deliberations in the House and Senate will define the limits of presidential aspirations, at least for this year. Developments thus far suggest that the president will not be able to enact cap-and-trade legislation (the linchpin of his climate change agenda) or to make permanent his redistributive tax cuts. On the other hand, the congressional budget initiatives will not prevent fundamental health insurance reform from moving forward. In fact, there is far more consensus about the contours of acceptable reform today than there was when Bill Clinton tried and failed 16 years ago. Paying for reform may well be the most formidable remaining obstacle: helping poor- and moderate-income families purchase health insurance will cost an estimated $120 billion annually, and the congressional budget committees have refused to endorse the tax increases the Obama administration proposed to help pay for it. Given the dire fiscal outlook for the next decade, with uncertainty rising that foreign governments will be willing to fund U.S. deficits, it seems unlikely that Congress will adopt comprehensive health reform without an equally comprehensive funding strategy.

One thing is clear: getting a historically anti-statist and tax-averse people to go along will require all of President Obama’s considerable persuasive powers. A recent Pew survey indicated that despite everything, Americans are still more disposed to fear “big government” than they are the corporate miscreants the government is trying to bring to heel.

Now consider foreign and defense policy.

Obama inherited two wars, a badly stressed military and a world that had lost confidence in America’s judgment. As he promised during the campaign, he has begun to draw down our forces in Iraq and to beef up our efforts in Afghanistan. He has proposed a defense budget that shifts the emphasis from Cold War-era weapons systems to the troops, training and weapons needed to fight irregular conflicts more effectively and with less stress on our forces. He has moved forcefully to change the tone of our relations with other nations, offering consultation and concerted action to our friends and respectful dialogue to those of our adversaries who are willing (as he put it in his inaugural address) to unclench their fist. And he has dispatched high-level special envoys to the world’s worse trouble spots.

So far, so good. The challenge now is to turn tone into substance and priorities into achievements. The early signs are mixed at best, and developments throughout the Middle East are discouraging. After a lull, sectarian violence in Iraq seems to be increasing once again. It is not clear that more troops and a new strategy will be enough to turn the tide in Afghanistan. The failure of our NATO allies to offer significant new assistance is not making the job any easier. (Nor is the open skepticism of many leading Democrats.) Taliban forces moved to within 70 miles of Pakistan’s capital before beating a tactical retreat.

Despite the mediation skills and experience of former senator George Mitchell, it appears the Israeli and the Palestinian leaders are not secure enough to enter meaningful negotiations. The Iranian leadership responded to Obama’s overtures by imprisoning an American reporter and denouncing Israel as a racist nation. It remains to be seen whether American good will and admission of past errors will lay the foundation for effective new policies. One thing is clear: even if the president were not facing an economic crisis, global challenges would be more than enough to keep him busy. In this respect, among others, the 1990s proved to be the proverbial calm before the storm.

I close with a final example of how difficult it is for this (or any) president to keep the country focused on his preferred agenda. Obama wants to “turn the page” on the Bush administration and to look forward in hope, not backward in anger. In that spirit, he tried to end the lingering controversy over interrogation tactics by simultaneously releasing long-withheld documents from the Bush Justice Department and ruling out prosecuting either those who drafted them or those who relied upon them. His strategy blew up in his face, sparking new controversy and forcing him to backtrack on the issue of possible prosecutions. Even if that doesn’t happen, Congress may convene a commission of inquiry that will keep the issue alive for years.

With crises at home and abroad, President Obama’s desire to stay focused on the future is entirely understandable. But despite his wishes and enormous political gifts, he can neither exorcise partisan bitterness nor eliminate the power of memory in our public life.