Obama takes it on the chin

The Democrats suffer a week from hell. Can they bounce back?

obama takes it on the chin

It was supposed to be a week to celebrate Barack Obama’s first anniversary of bringing hope and change to the White House. Instead, thanks to Massachusetts voters, the Supreme Court, and even members of his own party, the past week was arguably the worst of his presidency, leaving him and congressional Democrats scrambling to pick up the shards of their policy agenda and electoral futures, in a political landscape that was suddenly transformed.

The loss of a special election in the largely Democratic state of Massachusetts to replace the late Ted Kennedy, the Senate’s liberal lion, was a humiliation for Democrats and a wake-up call about the depths of dissatisfaction in the country. A little-known Republican state legislator, Scott Brown, who ran as a truck-driving everyman opposed to the Democratic agenda in Congress, handily defeated the state’s Democratic machine candidate, state Attorney General Martha Coakley, on Jan. 19. That loss held an urgent lesson for every Democrat whose seat is up for re-election this November: the same independent voters who swept Obama into office in 2008 have turned against the President’s party. “I think the Massachusetts voters were saying what the voters of ’06 said and voters of ’08 said. Our country is not working right. We want you to change it,” said the House majority leader, Steny Hoyer, in the aftermath.

Not only was the loss of Kennedy’s seat humiliating, but by ending the 60-vote filibuster-proof Democratic majority in the Senate it could very well mean the end of health care reform. More than anything, it highlighted the fact that Democrats had squandered a year—and a Senate supermajority—arguing amongst themselves about the details of that reform package. And in the wake of their defeat, they once again displayed their disunity. House Speaker Nancy Pelosi said she could not drum up the necessary votes in the House to proceed along the simplest way forward—to pass the exact version of health care reform that had already made it through the Senate so it would not have to return to that chamber with changes.

Some Democrats wanted to amend the bill, others to scrap it and start over. Obama urged his party to get back on track. “I would advise that we try to move quickly to coalesce around those elements of the package that people agree on: that we know that we need insurance reform, that health insurance companies are taking advantage of people.” But Hoyer said the Democrats are not in a rush. “Democratic leaders are taking time to talk to our members about what they’re hearing from constituents and to digest the message that voters in Massachusetts were sending,” he said a week after the by-election.

But what was that message? Certainly a confusing one: a poll by the Washington Post, the Harvard School of Public Health and the Henry J. Kaiser Family Foundation found that while Massachusetts voters opposed Washington’s health care legislation 48 per cent to 43 per cent, 68 per cent backed the state’s own system of near-universal coverage—which had served as a model for the Democrats. It was signed into law in 2006 by then-Republican governor Mitt Romney, who will likely seek his party’s presidential nomination for 2012, and Brown had voted in favour of it. (Brown says he still supports the program but doesn’t want to subsidize it for other states.) The poll also found Brown’s voters were divided: 50 per cent wanted him to use his vote to defeat the Democratic health care plan, while 48 per cent wanted him to work with Democrats to alter the bill.

As Obama’s approval ratings now hover below 50 per cent, and his personal campaigning for Coakley proved ineffectual, one thing became clear: handing his signature policy issue over to the single least popular political institution in the nation—the U.S. Congress—did not help (Obama had instructed Congress to come up with a workable health care package). The President also stands accused of focusing too much on health care, when voters are worried about jobs, jobs, jobs. Moderate Democrats warned him to give up on other goals such as climate change legislation, comprehensive immigration reform, or other big spending projects. “I think the President is going to have to scale back his agenda after we pass health care reform,” said Senate Democrat Bill Nelson of Florida.

But if Obama is preparing to ratchet back, it wasn’t obvious. “I’d rather be a really good one-term president than a mediocre two-term president,” he told Diane Sawyer on ABC News. The President may be unflappable, but he showed he isn’t oblivious: in the wake of defeat, he invited his 2008 campaign director, David Plouffe, to come work for him in the West Wing. And he quickly launched into a remake of his presidency.

While the left and centre of his party bickered over health care, Obama tried a different approach: changing the subject. The very next day after the Massachusetts rout, he went on a populist attack against the big banks. He pushed proposed new regulations for Wall Street aimed at preventing any bank from being “too big to fail,” by limiting its market share of deposits, increasing capital reserve requirements, and introducing other regulations aimed at curbing what Obama called excessive risk-taking. But just as the President was getting warmed up with his anti-Wall Street theme, he got blindsided when the U.S. Supreme Court delivered a surprise of its own. A landmark ruling swept away a big chunk of long-standing campaign finance law, and empowered labour unions and corporations—such as those same big banks—to spend unlimited sums of their own money to run ad campaigns aimed at electing or defeating individual politicians. No more would they be limited to raising special pots of money for running “issue ads.” Now they could go straight for the jugular: the 5-4 majority decision said the law amounted to censorship of the free speech rights of unions and corporations.

Obama denounced the ruling, saying it would lead to a “stampede of special interests” into elections. But he soon faced another headache. He had nominated his central banker, Federal Reserve Board chairman Ben Bernanke, for a second term. Originally appointed by Bush, Bernanke had since become a target for politicians on both sides of the aisle, who faulted his failure to foresee the financial crisis, and policies that they consider favour Wall Street over Main Street. Several Democratic senators said they would not vote to reconfirm Bernanke—forcing Obama to lobby for their support in an effort to avoid a potential defeat that would further embarrass the White House, likely shake the financial markets, and open the door to a politically charged fight over a successor.

In crafting his state of the union speech, Obama once again tried to change the storyline. Focusing on jobs and the economic pain felt by millions of Americans, he planned a smattering of economic proposals aimed at the middle class. They included tax breaks for middle-income earners raising children, people paying off student loans, workers contributing to retirement savings, and people caring for elderly relatives. And he proposed a spending freeze on government programs to underscore his seriousness about controlling spending, which has emerged as a major concern among voters. America’s public debt will reach US$8.8 trillion by the end of the year, or 60 per cent of GDP, the largest burden since the early 1950s, according to the Congressional Budget Office. The freeze is expected to save a modest US$250 billion over 10 years, while the deficits will be in the trillions. White House spokesman Robert Gibbs said it was only a first step. “$250 billion over 10 years is not going to solve our budget deficit,” he said, but added, “If we can’t cut that, how do you suggest we get at the other money?”

Critics were quick to point out that the plan was a departure from the President’s own campaign rhetoric. In a debate against John McCain, for example, Obama derided an across-the-board spending freeze as a “hatchet.” The White House claims Obama’s plan is more “scalpel” because it allows for some flexibility and does not apply to all domestic spending. But the very idea again divided members of his party, some of whom don’t want to see any spending cuts in the midst of a recession.

And, in the backdrop, the relentless stream of Democrats dropping out continued. On Sunday, Rep. Marion Berry of Arkansas, a moderate “Blue Dog” Democrat from a district that went for John McCain in 2008, became the sixth Democrat to announce he would be retiring from politics ahead of the November elections. Then, on Monday, came the announcement that the son of Vice President Joe Biden, Beau Biden, who was widely expected to run for his father’s former Senate seat in Delaware, wanted to remain the state’s attorney general, making it more likely that the vice-president’s former seat could go to a Republican.

Meanwhile, a new audiotape surfaced, with a voice believed to be Osama bin Laden’s, taking credit for the foiled Christmas Day underwear bomber and threatening more attacks against America. And if all that wasn’t enough, just as he prepared his state of the union address for Wednesday, Obama was supposed to report for jury duty in Illinois. The President bowed out, explaining to the court that for the moment, his agenda is rather full.