In the days following the assassination of John F. Kennedy in 1963, Lyndon B. Johnson was left to pursue his predecessor’s unfinished legislative agenda. White House insiders considered the task nearly impossible. The civil rights bill was bottled up in the House Rules Committee, where its chairman was intent on running out the clock
until the election the next year. A critical tax cut, meanwhile, was bogged down in the Senate, where the Finance Committee chairman was holding it hostage.
Johnson surveyed the legislative landscape and knew he had to shake things up.
Rather than negotiate with Congress, Johnson turned the goodwill of the nation into a force with which to bludgeon the GOP and expand what was politically possible. He took his case to the American people, reminding them that the GOP was the “Party of Lincoln,” and flooded Washington with religious leaders who lobbied Congress.
The result was a tax cut that is largely credited with ushering in an era of high growth and, of course, the 1964 Civil Rights Act. Had Johnson stuck to inside baseball, he would have struck out twice.
Barack Obama could have learned something from LBJ. As a candidate Obama promised to change the way Washington works and he rode a wave of global support into the White House. His first two years in office have repeatedly been compared to the New Deal under Franklin Roosevelt and the Great Society under Johnson, with historic achievements on health care, Wall Street reform and other domestic priorities.
But Obama’s first term has also left many of his supporters wondering whether those accomplishments could have been bigger in size, scope and impact. The health care reform legislation was built largely off a conservative model, with millions of people shuttled into the private market. The financial regulatory reform bill contained carve-outs for the private sector and is widely regarded as not far-reaching enough to curb some of the banking industry’s worst practices. The White House made little effort to push labor priorities like the Employee Free Choice Act, which would have granted workers more avenues to form unions. The Iraq war may have ended, but the war in Afghanistan heated up, with lingering confusion as to why troops remain there.
Now, just a few months before the election, Obama is suffering from an engagement gap. According to a late July Gallup poll, only 39 percent of Democrats said they were “more enthusiastic” than usual about voting. That number was 61 percent at a similar time in 2008. Republicans, meanwhile, are more fired up now (51 percent) than they were in 2008 (35 percent).
Obama is no longer regarded by the majority of voters as a constructive reformer. An August 21 NBC News/Wall Street Journal poll showed that only 37 percent of the respondents thought he would bring the “right kind of change” in his second term.
Although Democrats tend to like the president more than Republicans like Mitt Romney, his re-election is far from assured.
How did a candidate who drew two million individuals to his inauguration and retained a 13 million-member email list lose that magic?
According to campaign officials, White House aides, members of Congress, top party strategists, labor leaders and progressive advocates, the main reason is that Obama has come to resemble the creature of Washington he campaigned against.
Whereas FDR and LBJ marshalled the American people as weapons in legislative combat, BHO came to Washington and tried to play the game like an old hand.
A president, by definition, is an inside player, tasked with executing difficult rounds of political negotiations. But without the energy of the campaign, Obama found himself with far less power than expected. “They got to Washington and they became of the place, and assumed that by virtue of having an email come that has ‘WH’ on it, that everyone will go, ‘Oh, OK,’” said Michael Steele, the former head of the Republican National Committee.
Van Jones, a former White House official whose background in grassroots organizing gave him a different perspective from those of officials who’d come from the Clinton administration, summed up the consternation felt by many Obama supporters.
“Who killed the hope?” Jones wondered. “And what happened?”
“OUT-MARCHED BY THE RIGHT”
Once in office, the soaring rhetoric of the election quickly gave way to legislative realities. Obama, as his top adviser David Axelrod noted in an interview, had pledged to “find and form coalitions” as president. Not doing so once in office would constitute a broken promise in its own right. But promising to pursue an era of post-partisanship and actually getting lawmakers to buy into the concept were two very different things.
“It is sometimes blithely said, ‘You had the White House and the House and after [Arlen] Specter [switched parties] you had a filibuster-proof majority [in the Senate]. Why didn’t you go more visionary?’” said Jared Bernstein, Vice President Biden’s former top economic adviser. “That’s an extremely un-nuanced view of the reality. There were numerous Democrats whose vision was far from aligned with ours.”
Addressing the challenges brought about by the recession also strained Obama in the early weeks and months of his administration, demanding the quick and secretive work he had previously decried.
“Obama knows how to swim. He’s not an Olympic swimmer, but he knows how to swim,” Senate Majority Leader Harry Reid (D-Nev.) said in a recent interview in his office on Capitol Hill. “He found himself in this huge river, the current is all running against him. The country has lost eight million jobs, and he knows he has to come up for air once in awhile, or he’s gonna drown. And he does that, he comes up for air in the very best way he can.
“For me, he was always there, even though the stream was against him. He was always able to get out of the water and help us. I think his inside game was just trying to keep the country alive.”
But if Obama was forced to play the inside game out of necessity, the president’s progressive critics note that he never really tried to see if trying the outside game could work.
During the crafting of the stimulus bill in the winter of 2008 and 2009, for example, Obama’s top economic advisers started from the premise that there were limits to what was politically possible. When the incoming head of the Council of Economic Advisers, Christina Romer, suggested that $1.8 trillion was needed to fill the hole in the economy, Obama’s top economic adviser, Larry Summers, rebuffed her, calling the figure impractical.
According to Noam Scheiber of The New Republic, Romer pared her proposal down to $1.2 trillion, but Summers still considered it too heavy a lift to get through Congress. The memo Summers finally presented to the president listed $800 billion as the top figure.
A top White House official told Huffington that larger proposals were still debated. But by then, the official said, the president’s Hill team had been warned that moderate Democrats wouldn’t go for anything over $800 billion. They chose to operate within those political constraints rather than try to expand them.
Obama’s team worked hand-in-hand with congressional leaders to develop the actual language of the bill. The president did venture outside the Beltway to sell the stimulus, making a trip to Florida to stand alongside one of the few supportive Republican lawmakers, then-Gov. Charlie Crist. But he did not travel to Maine to convince the moderate Republican Sens.
Susan Collins and Olympia Snowe — who, unlike Crist, actually had a vote — to back the measure, as progressives urged him to do. The infrequent use of his campaign arm, Organizing for America, was also criticized.
“We did put pressure on them. We did go out and campaign. We went down to Florida and stood with Charlie Crist and he was almost never heard from again,” said Axelrod. “We made the case that we needed to intervene [to save the economy]. But as a political matter there was an upward limit for what was sellable.”
As the White House negotiated, Republicans stole a page from the Democratic playbook and took their arguments to the American people.
“We used their model, and what surprised me was they stopped using their model,” Steele told Huffington.
“I always thought that Obama would actually do both, that he would play the inside game while he was building up the outside strategy of more of a global network that he could pull the trigger on, push a button and, you know, 1,300 people would respond in 10 minutes type thing,” said Steele. “I was actually, absolutely surprised. I think they took it for granted. I think they assumed that, ‘They love me so much, they’ll always be there.’ Well, as you know, in this town, love is fleeting. It’s a very fickle thing.”
When Collins decided that the stimulus could include no money to upgrade schools, Bernstein said, the White House decided not to fight her on it. “The idea that the president would then go to Maine strikes me as a questionable strategy and one we chose not to follow,” he said.
The success of the stimulus is still being debated. Time’s Michael Grunwald’s book The New New Deal makes the case that it was a historic investment in reshaping the U.S. economy along the lines of what took place under FDR. But economists have also documented how insufficient the Recovery Act was in filling the hole the recession created. And for many Democrats, the failure to fight on the ground for a policy that met the direness of the situation remains a fatal error.
“The one thing that I learned when I was at the White House was that we thought we had everything we needed to govern: Obama, Pelosi — best Speaker ever — 60 votes in the Senate [Specter would switch parties after the stimulus passed],” said Van Jones, who, since leaving the White House, has become active in outside progressive organizations.
“Turns out we had a third of what we needed. You need media on your side — for-real media, like [Republicans] have with Fox. And you need a movement in the streets like they have with the Tea Party. It turns out if you don’t have the media or the movement, you’ll get beat to butter on the government level.”
Jones told Huffington he was stunned to see conservatives out-organize the White House.
“How was it that for two years the right wing in America had a monopoly on both the ground war, street protests, and the idea war? That’s almost unprecedented,” he said. “I mean, how are we going to get out-marched by the right in an economic catastrophe?”
BACK-ROOM DEALS
The mad dash to pass a stimulus may have forced the White House to not let the perfect be an enemy of the good. But the health care bill it began pursuing soon thereafter made clear the extent to which the president was willing to engage in transactional politics.
The decision to tackle health care reform itself was born from an un-inspirational premise. While Obama had talked frequently during the campaign about the moral obligation to expand access to the uninsured, it was basic accounting that convinced him to move forward in the spring of 2009. Rising health care costs are one of the biggest drivers of the national debt, and curbing the rate of growth was not just a policy objective, but a governing necessity.
“He was persuaded to do health care, I believe, by Peter Orszag [the budget director], not Ted Kennedy [health care reform’s righteous champion],” explained one top ally in the fall of 2010, who requested anonymity in order to speak frankly.
Having reached this conclusion, Obama and his advisers made a set of strategic decisions that would define the subsequent health care reform process. The first was that everything had to be paid for. There was little appetite for more deficit spending after the Troubled Asset Relief Program, the stimulus and the auto bailout. The second was to grant Congress a huge say over the legislative process.
“There was a view — and I don’t know how accurate the view is — that in ‘94, Clinton didn’t spend a lot of time dealing with all the stakeholders, and they all came out against it. Because they didn’t feel brought into the process,” explained a top administration official shortly after health care passed, who spoke on condition of anonymity because he wasn’t authorized to discuss the deliberations. “So we brought them all in.”
At first, openness meant hosting public forums where groups ranging from the unions to private insurance companies could voice their visions for reform, from the need for preventative services to the pitfalls of fee-for-service care.
Behind the scenes, however, the White House went out of its way to ensure that any group or lawmaker with relevance to the bill wasn’t alienated by the negotiations. According to Democratic officials close to the situation, the administration decided not to enlist its massive email list to fight for the public option — a government agency to provide insurance coverage — because they worried that the measure would inevitably be traded away, disappointing those who fought for it.
“He was husbanding them for the political battles to come instead of releasing them to go nuts,” said a former top Senate leadership aide. “He had built up this vaunted [grassroots machine], they had spent years building this thing, and it wasn’t released on health care, for instance, his top priority.”
Meanwhile, the White House cut deals with some of health care reform’s traditional opponents in order to try to buy their support — or at least dull their criticisms. They assured private insurers that the final reform bill would have a large private-sector component. In exchange, AHIP, the insurance industry’s lobbying arm, kept their reservations quiet, albeit while secretly funnelling money to the Chamber of Commerce for its anti-health care reform ad campaign.
PhRMA, the lobbying group of the pharmaceutical industry, agreed to chip in $100 billion over 10 years towards health care reform (a figure they lowered to $80 billion) in exchange for an expanded pool of customers. The administration also promised not to use its purchasing power to lower prescription drug prices, and to oppose the re-importation of cheaper drugs from Canada and elsewhere, key PhRMA priorities.
Emails obtained by GOP investigators on the House Energy and Commerce Committee and provided to Huffington show just how closely the White House and PhRMA were working together. In August 2009, after The Huffington Post obtained a memo detailing the bargain on health care, officials at the two agencies swapped ideas on how best to deny the allegations.
“Clearly, someone is trying to short circuit our efforts to try and make health care reform a reality this year,” wrote Ken Johnson, a top lobbyist for PhRMA, in an email to the White House’s top health care communications official, Linda Douglass.
“Excellent. Thanks Ken,” replied Douglass.
The White House also denied the memo’s accuracy, but the final bill by the Senate Finance Committee produced followed the agreement almost precisely.
On the Hill, the chair of that committee, Sen. Max Baucus (D-Mont.) had been granted a huge leash to negotiate with Republicans. The negotiations dragged on for months as the public — with a heavy assist from congressional Republicans — soured on reform. Throughout the summer of 2009, angry crowds at town hall meetings berated Democratic lawmakers on everything from government overreach to death panels.
By the fall, with Democrats acting skittish, the president chose to go big, delivering a speech to a joint session of Congress laying out the virtues of large-scale reform. In it, he returned to the lofty rhetoric that he had featured on the campaign trail.
“We did not come here just to clean up crises. We came here to build a future,” he said. “So tonight, I return to speak to all of you about an issue that is central to that future — and that is the issue of health care. I am not the first president to take up this cause, but I am determined to be the last.”
He chastised lawmakers for using the health care debate to score political points and declared that the “time for bickering” was over. But when it came down to actually securing votes, Obama and his allies continued to employ a carrot-centric approach.
Sen. Ben Nelson (D-Neb.) was granted the infamous “cornhusker kickback,” in which Nebraska would be granted 100-percent matching federal funds for the Medicaid expansion to be required under the law. When the deal engendered howls of outrage, Nelson had to ask that it be taken out of the final legislative language. Then-Sen. Evan Bayh (D-Ind.) was offered a provision that benefited medical device manufacturers, who have heavy influence in his state. Sen. Mary Landrieu (D-La.) was given millions in Medicaid money for her state.
Sen. Joseph Lieberman (I-Conn.), who had promised the Democratic leadership that he wouldn’t be a nuisance on domestic policy in exchange for keeping his post as chair of the Homeland Security and Governmental Affairs Committee, ended up being just that. When he objected to the public option, he was offered a provision he previously supported: a Medicare buy-in, allowing consumers from the ages of 55-65 to pay a premium for the coverage. When he rejected that too, Reid was apoplectic.
“He just wasn’t honest with me,” Reid muttered at one point.
But nobody pressured Lieberman to drop his pledge to uphold a filibuster of the bill. Asked by The Huffington Post at the time whether he was willing to give up his gavel in the fight over health care, Lieberman said “Oh, God no. Nobody’s asking me that.”
In fact, when Obama addressed the Democratic caucus at the height of the debate, as the public option and Medicare buy-in were teetering on the brink, Lieberman said the president told him simply to work it out.
“When he came to the caucus he said, ‘Just try to work this out as you get to the end here.’ And I said, ‘OK,’” explained Lieberman.
And when Lieberman made his objections to the Medicare buy-in provision known, then-White House Chief of Staff Rahm Emanuel, a notorious political knee-capper, kept his cool.
“Find a way to get to yes,” he told the senator during a meeting in Reid’s office.
The final bill expanded Medicaid eligibility, improved access to health insurance by allowing children up to age 26 stay on their parent’s plan, and banned discrimination against patients with pre-existing conditions. It capped the amount of money insurance companies could spend on non-health care functions, helped seniors with their prescription drug coverage, and promoted preventative care.
But it did not include a public option — with could have saved tens of millions of dollars, according to the Congressional Budget Office — or the Medicare buy-in provision. And the administration had limited the ability of the government to negotiate directly with drug companies.
“I think they made pretty naive mistakes, trying to cut a deal with PhRMA. They gave PhRMA too much in the process,” AFL-CIO President Richard Trumka told The Huffington Post in the spring of 2010, shortly after the Affordable Care Act passed. “They didn’t talk to us about it. They made that deal off the record.”
“And then when he started talking about jettisoning the public option, that’s when we started saying ‘This is ridiculous.’ It’s almost like they didn’t know how to negotiate,” Trumka added. “[Obama would] say ‘It’s not important.’ And anybody who’s been around a negotiating table knows, if they say it’s not important, consider it gone. You don’t even concern yourself with it. But if he was going to give it away he should’ve gotten something major in return for it. He got nothing.”
Politically, moreover, the president’s brand had been damaged by his own party.
“I think part of the sad commentary that is unusual for Obama is that he had overwhelming Democratic majorities and was still having to play an overly inside game,” said Andy Stern, the former head of the Service Employees International Union. “He should not have been having to play an inside game with his own team. Even on procedure. Not just on substance. They wouldn’t even give him a vote just to close down filibusters. ... I’m sure he was frustrated. He thought he was going to be bringing Democrats and Republicans together, not just Democrats together.”
Among Obama’s advisers, Axelrod was perhaps the most aware of this dynamic. At a caucus meeting in early February 2010, Sen. Al Franken (D-Minn.) laced into him and others for not showing enough spine and leadership.
“The fact is, when you have a party that expands from Ben Nelson to Bernie Sanders that is a lot of territory,” Axelrod conceded in an interview.
USING THE BULLY PULPIT
For the president and his defenders, there is a ready rejoinder to complaints about the inside game he played. In the end, the stimulus was passed and the economy was saved. Health care reform got done and tens of millions of people were granted access to health insurance. Obama, unlike any of his predecessors, notched that historic achievement.
“Knowing him, my suspicion is that he was a very smart, intuitive man who was looking towards what the best deal he could get would be for those issues,” said Steve Hildebrand, who served as deputy national campaign director for Obama’s 2008 campaign but has been critical of the president on legislative matters. “And he sort of moved beyond some of the aspects that he just didn’t think would ever be able to pass. I think there is some sense that having served with these relatively crazy people in Congress that he had a pretty good understanding of what was going to be acceptable and what wouldn’t fly.”
But that only raises the question of what Obama might have gotten had he done more to drum up support for his proposals outside Washington.
Long after Obama and Democratic leaders on the Hill had given up on the public option, progressive groups, working with two freshmen on the House side — Maine’s Chellie Pingree and Colorado’s Jared Polis — brought it back to life.
Democrats lost their 60-vote majority in the Senate in January 2010 when Scott Brown won a special election in Massachusetts to fill the late Ted Kennedy’s seat. Emanuel urged the president to whittle down the bill into small pieces that could pass through Congress. Pundits across town thought the whole enterprise was dead. It was the outside game that revived it.
The only possibility was to use a process known as reconciliation, a controversial legislative maneuver which requires only a majority vote. Pingree and Polis urged Reid to use reconciliation and put the public option on the floor.
But instead of lobbying Reid alone, the freshmen partnered with outside progressive groups who ran national petitions and lobbied other members to sign. Hundreds of thousands of people signed the petition, along with scores of Democratic members of Congress. Each time a new senator signed on, momentum grew. Eventually, more than 50 senators were on record supporting the public option through reconciliation.
Responding to the pressure, a Reid spokesman issued a statement saying that if the caucus wanted a vote, he would consider moving forward on it. It was a direct challenge to the White House, which had little desire to reignite what they thought was a hopeless debate.
A few hours after Reid’s office put out the statement, Emanuel met senior Reid aide Jim Manley and a few reporters from The Washington Post and The New York Times for dinner and drinks at Lola’s, a Capitol Hill bar and grill. Seeing Manley at the table, Emanuel, who was desperately just trying to get a bill through Congress, offered a response to Reid’s gesture with one of his own: a double-bird, an eerie sight given his half-severed right finger.
The public option never got a vote. But the outside game changed the fortunes of the seemingly dead health care bill.
Obama himself, with his signature effort on the brink, broke with the inside game playbook and used his bully pulpit in one of the most effective ways a president ever has. His aides demanded that cameras record his appearance before the House Republican Caucus retreat in Baltimore, during which he publicly called those lawmakers out for knee-jerk opposition and intellectual dishonesty. A month later, he held open meetings at the Blair House, debating congressional Republicans on the merits and shortcomings of their pieces of reform.
The Blair House summit was deemed a draw by the Capitol Hill press, but what the media missed was that Obama had redirected the nation’s attention to health care and away from the Brown victory. The momentum shifted. The party decided to move forward with reconciliation. Democrats had the space and capital they needed to get the Affordable Care Act passed.
The renewed push for the public option, though ultimately unsuccessful, helped save the bill, according to Democrats on the Hill.
“It helped a whole lot,” said Rep. James Clyburn (D-S.C.), the man then charge of whipping votes, of the Pingree-Polis letter. “The base getting fired up helped a whole lot. We could feel it out there.”
In an interview in his office the week the House passed the final piece of reform, then-Majority Leader Steny Hoyer (D-Md.) said he agreed. “It added energy to the effort to get to where we wanted to get,” he said, leaving open the question: Could it have been more helpful, earlier?
THE LINCOLN FACTOR
The outside game also helped progressives achieve other legislative victories that might have otherwise eluded them.
With health care complete, the Senate moved to finish Wall Street reform in the spring of 2010. The White House and its allies were still calling it “finreg” at the time — a bit of insider jargon short for “financial regulation” that typified the approach to that point. The House version of the bill was the handiwork of a master legislator, Financial Services Chair Barney Frank (D-Mass.), who worked hand in hand with senior White House and Treasury officials. As such, it was shot through with carve-outs and loopholes for the banks.
A strange thing began happening in the Senate, however. With consumer advocate Elizabeth Warren and a coalition of progressive and labor groups taking the fight to the public, the bill got stronger in the upper chamber. The White House, for its part, seized on a major Goldman Sachs scandal, as the bank was charged in April by the Securities and Exchange Commission with defrauding investors. Republicans and bank lobbyists found the timing of the announcement suspicious, but it worked to reignite public outrage at Wall Street. Rechristened “Wall Street reform” — much catchier than “finreg” — the bill started steamrolling.
Democrats saw a chance for a political win-win: Harry Reid took financial regulatory reform to the floor, knowing it didn’t have 60 votes, but daring Republicans to brave the headlines that would come from defending Wall Street. As cloture vote after cloture vote (the 60-member threshold vote needed to end debate) failed, Reid grew impatient. He wanted to pull the bill off the floor and move on, said Chris Dodd, then chairman of the Banking Committee.
“There have been times when he’s raised questions about whether or not we can actually go forward, and I’ve had to convince him that I thought we could go ahead and get the bill, but it was right to ask the question,” Dodd told The Huffington Post at the time. “A couple of times on financial reform, when they thought maybe we just ought to go on to something else, when we had so many cloture votes on it, but I and others were able to convince him that no, that we thought we could win the issue and we ought to keep it up.”
With White House backing, Senate Democrats kept it up. Every attempt by Republicans or bank-friendly Democrats to rip out or water down Warren’s brainchild, the Consumer Financial Protection Agency, was met with fierce resistance. “My first choice is a strong consumer agency,” the Harvard law professor told The Huffington Post in March 2010. “My second choice is no agency at all and plenty of blood and teeth left on the floor.”
Meanwhile, in Arkansas, online liberal activists teamed with Big Labor to challenge Sen. Blanche Lincoln in a Democratic primary. Lincoln had long been one of the most conservative Democrats in Congress, and as chair of the Agriculture Committee, she was charged with writing the piece of Wall Street reform that dealt with derivatives.
She shocked K Street and the Washington establishment when, six weeks before her primary, she released tough legislation that tightly regulated the derivatives market. The move sapped her progressive challenger, Lt. Gov. Bill Halter, of momentum. Lincoln beat back most efforts to weaken her language.
The night of Lincoln’s victory in June 2010, a senior White House official got in touch with POLITICO reporter Ben Smith to snipe. “Organized labor just flushed $10 million of their members’ money down the toilet on a pointless exercise,” the official said. “If even half that total had been well-targeted and applied in key House races across this country, that could have made a real difference in November.”
Labor may have lost that specific vote to oust Lincoln, but by taking the fight outside, it won legislative language that strictly regulated trillions of dollars of financial transactions. Considering the end result, the price tag was cheap.
A LOSING STRATEGY
Voters delivered a firm rebuke to the president in the November 2010 midterm elections. Democrats lost control of the House of Representatives, and the president’s health care law proved to be a rallying point for Republican voters. Obama’s top advisers concluded that they needed to demonstrate the appropriate humility.
This attitude only bogged the White House down further within the inside game. The lame duck session saw major victories on a nuclear non-proliferation treaty and an end to “don’t ask, don’t tell,” the longstanding military policy that prohibited gay members from openly serving. But even with the public in favor of letting tax cuts expire on high-end income brackets, the administration bowed to concerns from within their own party and negotiated a deal with Republicans to extend all the Bush tax cuts for two more years.
In strategy sessions, the president and his advisers looked at ways to move various agenda items, from immigration reform to additional stimulus, through a divided Congress. Top officials believed that if they could earn the public’s trust on the deficit and remove that issue from the table, Republicans would join them on other items.
And so, in the spring of 2011, as congressional Republicans threatened to shut down the government unless Democrats agreed to steep spending cuts, the White House looked for middle ground. Without prior warning, then-White House Chief of Staff Bill Daley offered House GOP leadership a higher level of cuts than what congressional Democrats were prepared to offer, according to multiple sources involved in negotiations.
“Our intent was to avoid the shutdown of the government,” Daley told Huffington. “The president was committed to getting spending under control, and that’s why we agreed to the deal that ended up passing.”
Privately, the administration had determined that the president would be hurt badly if the government shut down. Bill Clinton had won that battle in the mid-1990s. But he had benefitted from having a tempestuous Speaker of the House, Newt Gingrich, as his political bete noir.
“[House Speaker John] Boehner was not going to become the enemy,” said one top Obama aide, who spoke on condition of anonymity to discuss those internal deliberations. “He was not going to be the guy who people emoted anger towards.”
The two sides eventually reached an 11th-hour agreement to keep the government open. But the White House’s hope that these types of deficit-reduction negotiations could produce a detente on other items was quickly dashed. House Republicans began plotting how to use a historically mundane vote to raise the debt ceiling as a means of extracting even more from the administration.
For months, the administration believed that the debt ceiling fight would ultimately be resolved with only moderate drama. For all the talk of a frosty relationship between the president and Boehner, top White House aides considered the Ohio Republican a reasonable individual amidst a caucus of crazy. On June 24, 2011, the staffs to the president and the speaker held the first in a series of secret meetings to hammer out a grand bargain.
With barely any input from fellow Democrats, Obama placed sacred cow after sacred cow on the block: massive cuts to discretionary spending ($1.2 trillion over 10 years), gradual changes to the retirement age for Medicare, changes the premium structure for Medicare Part B and D and changes to the way Social Security benefits were paid starting in 2015. In exchange, the White House demanded $800 billion in revenue increases.
As negotiations continued in private, pitfalls emerged on the Hill. A group of senators known as the Gang of Six began reviving their own debt-reduction formula. It had similar features to the deal Obama and Boehner were laying out, but also called for roughly $1.2 trillion more in revenues.
Those Democrats who were bound to have been angered with the president’s proposal, would be apoplectic now, knowing how bad a deal he had struck. The grand bargain was effectively dead. Obama went to Boehner looking for more revenues, but the speaker walked away.
The president had narrowed an inside-game strategy even further, in the hope that direct one-on-one negotiations might be more fruitful. It had nearly worked. Rep. Paul Ryan (R-Wisc.), now the Republican vice-presidential nominee, reportedly warned Boehner that a deal wasn’t just bad policy but would have effectively guaranteed Obama’s re-election. And Obama got credit for his willingness to reach out to Republicans, who, in turn, took a hit in the polls. But his own party was alarmed by what he was willing to give up in the process.
For progressives, the White House’s inability to see the unbending recalcitrance of congressional Republicans remains the biggest, most inexplicable shortcoming of the president’s first term in office. The problem, as Andy Stern, the former SEIU president, put it, was not just that Obama attempted to play the inside game. It’s that he did so time and time again without recognizing the utter pointlessness of the endeavor.
“We were watching the administration lose, and that’s when I think people began to appropriately ask: ‘What in the world are we doing here?’” said Stern, before listing his examples. “The public option, the lack of a plan about deficit reduction, the Republicans’ willingness to take the country over the cliff, and the president trying to cut a back door deal with Boehner as if he was going to be different than the rest of the extremists.”
AN ENGAGEMENT GAP
After the debt-ceiling debacle, the White House’s approach changed. The administration concluded that legislative negotiations with House Republicans would forever be an act of frustration unless they shaped the public debate first.
“You don’t want to date these people,” one exasperated top administration official told reporters on July 22, 2011, the night that the Boehner-Obama deal imploded.
“I think it was obvious by the end of the summer 2011 that the leadership in the House was not going to go anywhere further than the minimum amount needed to avoid fiscal calamity,” explained Daley, who left the White House in early 2012.
Led by economic adviser Gene Sperling and with a push from Axelrod as well, the president turned his focus from debt reduction to job creation. He put together a package of proposals — targeted tax cuts, infrastructure investments, money for teacher retention and first responder hiring, to name a few — and barnstormed the country to build up support.
The administration launched a “We Can’t Wait” campaign highlighting the executive actions the president was taking to stimulate the economy on his own.
“I need your help,” Obama told an audience in Denver in October last year. “Some of these folks in Washington still aren’t getting the message. I need your voices heard. I especially need you young people, I need you guys involved. I need you active. I need you communicating to Congress. I need you to get the word out. … Tell them, ‘Do your job.’”
While the efforts did little to dissolve GOP opposition — only a minor chunk of the president’s jobs bill ended up being passed — the outside game achieved its desired results. Congressional Republicans were left defensive and battered as the president assailed them to pass a year-long extension of his payroll tax cut. Boehner eventually folded his cards, agreeing to extend the rates without requiring spending cuts to offset the cost. It was the type of victory that had escaped the White House for months, if not years.
“I think [the debt ceiling debate] was a watershed event, because it was clear that ... these matters weren’t going to be easily resolved within the four walls of the cabinet room, or the conference room on Capitol Hill,” Axelrod said. “There’s no doubt that the lesson of that was that more, rather than less, public engagement was absolutely essential.”
Suddenly, the image of a president making progress began to emerge. And it was furthered along when he announced his support for same-sex marriage and a new administration policy that would end the deportation of undocumented immigrants who had advanced degrees or performed military service.
But for all that, the engagement gap facing the Obama campaign persists. Much of it is a product of a stagnant economy, which has sapped voters of the political energy they had in 2008. But even Obama’s defenders admit that his time spent governing as an insider has altered the perception of him as a change-agent.
“What you have is an incumbent president who naturally grew into the role of the presidency, away from a fire and brimstone candidate,” said Obama’s old deputy campaign manager Hildebrand, explaining the difference between 2012 and 2008.
Added Delaware Gov. Jack Markell, who has served as a business-savvy surrogate for the president’s re-election campaign: “This is a less romantic time, a less romantic campaign.”
“Maybe [Obama]’s had to do some more things you would term traditional,” Markell added. “But there’s no question his vision is more along the lines of where most Americans are in the terms of a strong middle class. He’s laid out a specific plan to get there, and you see it already, people really feel like he will fight for them more than Mitt Romney would.”
That may be true. Certainly, polls indicate that the public is aligned with Obama on the majority of issues, from Medicare to taxes to foreign policy.
Playing the outside game, however, requires enjoying the fight. As Jared Bernstein said, it means going to someone’s backyard and telling them to their face that they’re wrong. It means using political force to win with a bare majority rather than reaching consensus. It means letting go of the illusion that the Republican Party is looking to work with you.
For Obama, whose brand remains very much tied to the idea that partisanship can be overcome, it remains unclear whether he’s comfortable with that type of politics.
Explaining this spring how he would manage to enact his agenda in a second term, Obama was still looking forward to sitting down and cutting deals. This time, he said, Republicans would be nicer because he’s not running for re-election.
“I believe that if we’re successful in this election, when we’re successful in this election, that the fever may break, because there’s a tradition in the Republican Party of more common sense than that,” he said. “My hope, my expectation, is that after the election, now that it turns out that the goal of beating Obama doesn’t make much sense because I’m not running again, that we can start getting some cooperation again.”
until the election the next year. A critical tax cut, meanwhile, was bogged down in the Senate, where the Finance Committee chairman was holding it hostage.
Johnson surveyed the legislative landscape and knew he had to shake things up.
Rather than negotiate with Congress, Johnson turned the goodwill of the nation into a force with which to bludgeon the GOP and expand what was politically possible. He took his case to the American people, reminding them that the GOP was the “Party of Lincoln,” and flooded Washington with religious leaders who lobbied Congress.
The result was a tax cut that is largely credited with ushering in an era of high growth and, of course, the 1964 Civil Rights Act. Had Johnson stuck to inside baseball, he would have struck out twice.
Barack Obama could have learned something from LBJ. As a candidate Obama promised to change the way Washington works and he rode a wave of global support into the White House. His first two years in office have repeatedly been compared to the New Deal under Franklin Roosevelt and the Great Society under Johnson, with historic achievements on health care, Wall Street reform and other domestic priorities.
But Obama’s first term has also left many of his supporters wondering whether those accomplishments could have been bigger in size, scope and impact. The health care reform legislation was built largely off a conservative model, with millions of people shuttled into the private market. The financial regulatory reform bill contained carve-outs for the private sector and is widely regarded as not far-reaching enough to curb some of the banking industry’s worst practices. The White House made little effort to push labor priorities like the Employee Free Choice Act, which would have granted workers more avenues to form unions. The Iraq war may have ended, but the war in Afghanistan heated up, with lingering confusion as to why troops remain there.
Now, just a few months before the election, Obama is suffering from an engagement gap. According to a late July Gallup poll, only 39 percent of Democrats said they were “more enthusiastic” than usual about voting. That number was 61 percent at a similar time in 2008. Republicans, meanwhile, are more fired up now (51 percent) than they were in 2008 (35 percent).
Obama is no longer regarded by the majority of voters as a constructive reformer. An August 21 NBC News/Wall Street Journal poll showed that only 37 percent of the respondents thought he would bring the “right kind of change” in his second term.
Although Democrats tend to like the president more than Republicans like Mitt Romney, his re-election is far from assured.
How did a candidate who drew two million individuals to his inauguration and retained a 13 million-member email list lose that magic?
According to campaign officials, White House aides, members of Congress, top party strategists, labor leaders and progressive advocates, the main reason is that Obama has come to resemble the creature of Washington he campaigned against.
Whereas FDR and LBJ marshalled the American people as weapons in legislative combat, BHO came to Washington and tried to play the game like an old hand.
A president, by definition, is an inside player, tasked with executing difficult rounds of political negotiations. But without the energy of the campaign, Obama found himself with far less power than expected. “They got to Washington and they became of the place, and assumed that by virtue of having an email come that has ‘WH’ on it, that everyone will go, ‘Oh, OK,’” said Michael Steele, the former head of the Republican National Committee.
Van Jones, a former White House official whose background in grassroots organizing gave him a different perspective from those of officials who’d come from the Clinton administration, summed up the consternation felt by many Obama supporters.
“Who killed the hope?” Jones wondered. “And what happened?”
“OUT-MARCHED BY THE RIGHT”
Once in office, the soaring rhetoric of the election quickly gave way to legislative realities. Obama, as his top adviser David Axelrod noted in an interview, had pledged to “find and form coalitions” as president. Not doing so once in office would constitute a broken promise in its own right. But promising to pursue an era of post-partisanship and actually getting lawmakers to buy into the concept were two very different things.
“It is sometimes blithely said, ‘You had the White House and the House and after [Arlen] Specter [switched parties] you had a filibuster-proof majority [in the Senate]. Why didn’t you go more visionary?’” said Jared Bernstein, Vice President Biden’s former top economic adviser. “That’s an extremely un-nuanced view of the reality. There were numerous Democrats whose vision was far from aligned with ours.”
Addressing the challenges brought about by the recession also strained Obama in the early weeks and months of his administration, demanding the quick and secretive work he had previously decried.
“Obama knows how to swim. He’s not an Olympic swimmer, but he knows how to swim,” Senate Majority Leader Harry Reid (D-Nev.) said in a recent interview in his office on Capitol Hill. “He found himself in this huge river, the current is all running against him. The country has lost eight million jobs, and he knows he has to come up for air once in awhile, or he’s gonna drown. And he does that, he comes up for air in the very best way he can.
“For me, he was always there, even though the stream was against him. He was always able to get out of the water and help us. I think his inside game was just trying to keep the country alive.”
But if Obama was forced to play the inside game out of necessity, the president’s progressive critics note that he never really tried to see if trying the outside game could work.
During the crafting of the stimulus bill in the winter of 2008 and 2009, for example, Obama’s top economic advisers started from the premise that there were limits to what was politically possible. When the incoming head of the Council of Economic Advisers, Christina Romer, suggested that $1.8 trillion was needed to fill the hole in the economy, Obama’s top economic adviser, Larry Summers, rebuffed her, calling the figure impractical.
According to Noam Scheiber of The New Republic, Romer pared her proposal down to $1.2 trillion, but Summers still considered it too heavy a lift to get through Congress. The memo Summers finally presented to the president listed $800 billion as the top figure.
A top White House official told Huffington that larger proposals were still debated. But by then, the official said, the president’s Hill team had been warned that moderate Democrats wouldn’t go for anything over $800 billion. They chose to operate within those political constraints rather than try to expand them.
Obama’s team worked hand-in-hand with congressional leaders to develop the actual language of the bill. The president did venture outside the Beltway to sell the stimulus, making a trip to Florida to stand alongside one of the few supportive Republican lawmakers, then-Gov. Charlie Crist. But he did not travel to Maine to convince the moderate Republican Sens.
Susan Collins and Olympia Snowe — who, unlike Crist, actually had a vote — to back the measure, as progressives urged him to do. The infrequent use of his campaign arm, Organizing for America, was also criticized.
“We did put pressure on them. We did go out and campaign. We went down to Florida and stood with Charlie Crist and he was almost never heard from again,” said Axelrod. “We made the case that we needed to intervene [to save the economy]. But as a political matter there was an upward limit for what was sellable.”
As the White House negotiated, Republicans stole a page from the Democratic playbook and took their arguments to the American people.
“We used their model, and what surprised me was they stopped using their model,” Steele told Huffington.
“I always thought that Obama would actually do both, that he would play the inside game while he was building up the outside strategy of more of a global network that he could pull the trigger on, push a button and, you know, 1,300 people would respond in 10 minutes type thing,” said Steele. “I was actually, absolutely surprised. I think they took it for granted. I think they assumed that, ‘They love me so much, they’ll always be there.’ Well, as you know, in this town, love is fleeting. It’s a very fickle thing.”
When Collins decided that the stimulus could include no money to upgrade schools, Bernstein said, the White House decided not to fight her on it. “The idea that the president would then go to Maine strikes me as a questionable strategy and one we chose not to follow,” he said.
The success of the stimulus is still being debated. Time’s Michael Grunwald’s book The New New Deal makes the case that it was a historic investment in reshaping the U.S. economy along the lines of what took place under FDR. But economists have also documented how insufficient the Recovery Act was in filling the hole the recession created. And for many Democrats, the failure to fight on the ground for a policy that met the direness of the situation remains a fatal error.
“The one thing that I learned when I was at the White House was that we thought we had everything we needed to govern: Obama, Pelosi — best Speaker ever — 60 votes in the Senate [Specter would switch parties after the stimulus passed],” said Van Jones, who, since leaving the White House, has become active in outside progressive organizations.
“Turns out we had a third of what we needed. You need media on your side — for-real media, like [Republicans] have with Fox. And you need a movement in the streets like they have with the Tea Party. It turns out if you don’t have the media or the movement, you’ll get beat to butter on the government level.”
Jones told Huffington he was stunned to see conservatives out-organize the White House.
“How was it that for two years the right wing in America had a monopoly on both the ground war, street protests, and the idea war? That’s almost unprecedented,” he said. “I mean, how are we going to get out-marched by the right in an economic catastrophe?”
BACK-ROOM DEALS
The mad dash to pass a stimulus may have forced the White House to not let the perfect be an enemy of the good. But the health care bill it began pursuing soon thereafter made clear the extent to which the president was willing to engage in transactional politics.
The decision to tackle health care reform itself was born from an un-inspirational premise. While Obama had talked frequently during the campaign about the moral obligation to expand access to the uninsured, it was basic accounting that convinced him to move forward in the spring of 2009. Rising health care costs are one of the biggest drivers of the national debt, and curbing the rate of growth was not just a policy objective, but a governing necessity.
“He was persuaded to do health care, I believe, by Peter Orszag [the budget director], not Ted Kennedy [health care reform’s righteous champion],” explained one top ally in the fall of 2010, who requested anonymity in order to speak frankly.
Having reached this conclusion, Obama and his advisers made a set of strategic decisions that would define the subsequent health care reform process. The first was that everything had to be paid for. There was little appetite for more deficit spending after the Troubled Asset Relief Program, the stimulus and the auto bailout. The second was to grant Congress a huge say over the legislative process.
“There was a view — and I don’t know how accurate the view is — that in ‘94, Clinton didn’t spend a lot of time dealing with all the stakeholders, and they all came out against it. Because they didn’t feel brought into the process,” explained a top administration official shortly after health care passed, who spoke on condition of anonymity because he wasn’t authorized to discuss the deliberations. “So we brought them all in.”
At first, openness meant hosting public forums where groups ranging from the unions to private insurance companies could voice their visions for reform, from the need for preventative services to the pitfalls of fee-for-service care.
Behind the scenes, however, the White House went out of its way to ensure that any group or lawmaker with relevance to the bill wasn’t alienated by the negotiations. According to Democratic officials close to the situation, the administration decided not to enlist its massive email list to fight for the public option — a government agency to provide insurance coverage — because they worried that the measure would inevitably be traded away, disappointing those who fought for it.
“He was husbanding them for the political battles to come instead of releasing them to go nuts,” said a former top Senate leadership aide. “He had built up this vaunted [grassroots machine], they had spent years building this thing, and it wasn’t released on health care, for instance, his top priority.”
Meanwhile, the White House cut deals with some of health care reform’s traditional opponents in order to try to buy their support — or at least dull their criticisms. They assured private insurers that the final reform bill would have a large private-sector component. In exchange, AHIP, the insurance industry’s lobbying arm, kept their reservations quiet, albeit while secretly funnelling money to the Chamber of Commerce for its anti-health care reform ad campaign.
PhRMA, the lobbying group of the pharmaceutical industry, agreed to chip in $100 billion over 10 years towards health care reform (a figure they lowered to $80 billion) in exchange for an expanded pool of customers. The administration also promised not to use its purchasing power to lower prescription drug prices, and to oppose the re-importation of cheaper drugs from Canada and elsewhere, key PhRMA priorities.
Emails obtained by GOP investigators on the House Energy and Commerce Committee and provided to Huffington show just how closely the White House and PhRMA were working together. In August 2009, after The Huffington Post obtained a memo detailing the bargain on health care, officials at the two agencies swapped ideas on how best to deny the allegations.
“Clearly, someone is trying to short circuit our efforts to try and make health care reform a reality this year,” wrote Ken Johnson, a top lobbyist for PhRMA, in an email to the White House’s top health care communications official, Linda Douglass.
“Excellent. Thanks Ken,” replied Douglass.
The White House also denied the memo’s accuracy, but the final bill by the Senate Finance Committee produced followed the agreement almost precisely.
On the Hill, the chair of that committee, Sen. Max Baucus (D-Mont.) had been granted a huge leash to negotiate with Republicans. The negotiations dragged on for months as the public — with a heavy assist from congressional Republicans — soured on reform. Throughout the summer of 2009, angry crowds at town hall meetings berated Democratic lawmakers on everything from government overreach to death panels.
By the fall, with Democrats acting skittish, the president chose to go big, delivering a speech to a joint session of Congress laying out the virtues of large-scale reform. In it, he returned to the lofty rhetoric that he had featured on the campaign trail.
“We did not come here just to clean up crises. We came here to build a future,” he said. “So tonight, I return to speak to all of you about an issue that is central to that future — and that is the issue of health care. I am not the first president to take up this cause, but I am determined to be the last.”
He chastised lawmakers for using the health care debate to score political points and declared that the “time for bickering” was over. But when it came down to actually securing votes, Obama and his allies continued to employ a carrot-centric approach.
Sen. Ben Nelson (D-Neb.) was granted the infamous “cornhusker kickback,” in which Nebraska would be granted 100-percent matching federal funds for the Medicaid expansion to be required under the law. When the deal engendered howls of outrage, Nelson had to ask that it be taken out of the final legislative language. Then-Sen. Evan Bayh (D-Ind.) was offered a provision that benefited medical device manufacturers, who have heavy influence in his state. Sen. Mary Landrieu (D-La.) was given millions in Medicaid money for her state.
Sen. Joseph Lieberman (I-Conn.), who had promised the Democratic leadership that he wouldn’t be a nuisance on domestic policy in exchange for keeping his post as chair of the Homeland Security and Governmental Affairs Committee, ended up being just that. When he objected to the public option, he was offered a provision he previously supported: a Medicare buy-in, allowing consumers from the ages of 55-65 to pay a premium for the coverage. When he rejected that too, Reid was apoplectic.
“He just wasn’t honest with me,” Reid muttered at one point.
But nobody pressured Lieberman to drop his pledge to uphold a filibuster of the bill. Asked by The Huffington Post at the time whether he was willing to give up his gavel in the fight over health care, Lieberman said “Oh, God no. Nobody’s asking me that.”
In fact, when Obama addressed the Democratic caucus at the height of the debate, as the public option and Medicare buy-in were teetering on the brink, Lieberman said the president told him simply to work it out.
“When he came to the caucus he said, ‘Just try to work this out as you get to the end here.’ And I said, ‘OK,’” explained Lieberman.
And when Lieberman made his objections to the Medicare buy-in provision known, then-White House Chief of Staff Rahm Emanuel, a notorious political knee-capper, kept his cool.
“Find a way to get to yes,” he told the senator during a meeting in Reid’s office.
The final bill expanded Medicaid eligibility, improved access to health insurance by allowing children up to age 26 stay on their parent’s plan, and banned discrimination against patients with pre-existing conditions. It capped the amount of money insurance companies could spend on non-health care functions, helped seniors with their prescription drug coverage, and promoted preventative care.
But it did not include a public option — with could have saved tens of millions of dollars, according to the Congressional Budget Office — or the Medicare buy-in provision. And the administration had limited the ability of the government to negotiate directly with drug companies.
“I think they made pretty naive mistakes, trying to cut a deal with PhRMA. They gave PhRMA too much in the process,” AFL-CIO President Richard Trumka told The Huffington Post in the spring of 2010, shortly after the Affordable Care Act passed. “They didn’t talk to us about it. They made that deal off the record.”
“And then when he started talking about jettisoning the public option, that’s when we started saying ‘This is ridiculous.’ It’s almost like they didn’t know how to negotiate,” Trumka added. “[Obama would] say ‘It’s not important.’ And anybody who’s been around a negotiating table knows, if they say it’s not important, consider it gone. You don’t even concern yourself with it. But if he was going to give it away he should’ve gotten something major in return for it. He got nothing.”
Politically, moreover, the president’s brand had been damaged by his own party.
“I think part of the sad commentary that is unusual for Obama is that he had overwhelming Democratic majorities and was still having to play an overly inside game,” said Andy Stern, the former head of the Service Employees International Union. “He should not have been having to play an inside game with his own team. Even on procedure. Not just on substance. They wouldn’t even give him a vote just to close down filibusters. ... I’m sure he was frustrated. He thought he was going to be bringing Democrats and Republicans together, not just Democrats together.”
Among Obama’s advisers, Axelrod was perhaps the most aware of this dynamic. At a caucus meeting in early February 2010, Sen. Al Franken (D-Minn.) laced into him and others for not showing enough spine and leadership.
“The fact is, when you have a party that expands from Ben Nelson to Bernie Sanders that is a lot of territory,” Axelrod conceded in an interview.
USING THE BULLY PULPIT
For the president and his defenders, there is a ready rejoinder to complaints about the inside game he played. In the end, the stimulus was passed and the economy was saved. Health care reform got done and tens of millions of people were granted access to health insurance. Obama, unlike any of his predecessors, notched that historic achievement.
“Knowing him, my suspicion is that he was a very smart, intuitive man who was looking towards what the best deal he could get would be for those issues,” said Steve Hildebrand, who served as deputy national campaign director for Obama’s 2008 campaign but has been critical of the president on legislative matters. “And he sort of moved beyond some of the aspects that he just didn’t think would ever be able to pass. I think there is some sense that having served with these relatively crazy people in Congress that he had a pretty good understanding of what was going to be acceptable and what wouldn’t fly.”
But that only raises the question of what Obama might have gotten had he done more to drum up support for his proposals outside Washington.
Long after Obama and Democratic leaders on the Hill had given up on the public option, progressive groups, working with two freshmen on the House side — Maine’s Chellie Pingree and Colorado’s Jared Polis — brought it back to life.
Democrats lost their 60-vote majority in the Senate in January 2010 when Scott Brown won a special election in Massachusetts to fill the late Ted Kennedy’s seat. Emanuel urged the president to whittle down the bill into small pieces that could pass through Congress. Pundits across town thought the whole enterprise was dead. It was the outside game that revived it.
The only possibility was to use a process known as reconciliation, a controversial legislative maneuver which requires only a majority vote. Pingree and Polis urged Reid to use reconciliation and put the public option on the floor.
But instead of lobbying Reid alone, the freshmen partnered with outside progressive groups who ran national petitions and lobbied other members to sign. Hundreds of thousands of people signed the petition, along with scores of Democratic members of Congress. Each time a new senator signed on, momentum grew. Eventually, more than 50 senators were on record supporting the public option through reconciliation.
Responding to the pressure, a Reid spokesman issued a statement saying that if the caucus wanted a vote, he would consider moving forward on it. It was a direct challenge to the White House, which had little desire to reignite what they thought was a hopeless debate.
A few hours after Reid’s office put out the statement, Emanuel met senior Reid aide Jim Manley and a few reporters from The Washington Post and The New York Times for dinner and drinks at Lola’s, a Capitol Hill bar and grill. Seeing Manley at the table, Emanuel, who was desperately just trying to get a bill through Congress, offered a response to Reid’s gesture with one of his own: a double-bird, an eerie sight given his half-severed right finger.
The public option never got a vote. But the outside game changed the fortunes of the seemingly dead health care bill.
Obama himself, with his signature effort on the brink, broke with the inside game playbook and used his bully pulpit in one of the most effective ways a president ever has. His aides demanded that cameras record his appearance before the House Republican Caucus retreat in Baltimore, during which he publicly called those lawmakers out for knee-jerk opposition and intellectual dishonesty. A month later, he held open meetings at the Blair House, debating congressional Republicans on the merits and shortcomings of their pieces of reform.
The Blair House summit was deemed a draw by the Capitol Hill press, but what the media missed was that Obama had redirected the nation’s attention to health care and away from the Brown victory. The momentum shifted. The party decided to move forward with reconciliation. Democrats had the space and capital they needed to get the Affordable Care Act passed.
The renewed push for the public option, though ultimately unsuccessful, helped save the bill, according to Democrats on the Hill.
“It helped a whole lot,” said Rep. James Clyburn (D-S.C.), the man then charge of whipping votes, of the Pingree-Polis letter. “The base getting fired up helped a whole lot. We could feel it out there.”
In an interview in his office the week the House passed the final piece of reform, then-Majority Leader Steny Hoyer (D-Md.) said he agreed. “It added energy to the effort to get to where we wanted to get,” he said, leaving open the question: Could it have been more helpful, earlier?
THE LINCOLN FACTOR
The outside game also helped progressives achieve other legislative victories that might have otherwise eluded them.
With health care complete, the Senate moved to finish Wall Street reform in the spring of 2010. The White House and its allies were still calling it “finreg” at the time — a bit of insider jargon short for “financial regulation” that typified the approach to that point. The House version of the bill was the handiwork of a master legislator, Financial Services Chair Barney Frank (D-Mass.), who worked hand in hand with senior White House and Treasury officials. As such, it was shot through with carve-outs and loopholes for the banks.
A strange thing began happening in the Senate, however. With consumer advocate Elizabeth Warren and a coalition of progressive and labor groups taking the fight to the public, the bill got stronger in the upper chamber. The White House, for its part, seized on a major Goldman Sachs scandal, as the bank was charged in April by the Securities and Exchange Commission with defrauding investors. Republicans and bank lobbyists found the timing of the announcement suspicious, but it worked to reignite public outrage at Wall Street. Rechristened “Wall Street reform” — much catchier than “finreg” — the bill started steamrolling.
Democrats saw a chance for a political win-win: Harry Reid took financial regulatory reform to the floor, knowing it didn’t have 60 votes, but daring Republicans to brave the headlines that would come from defending Wall Street. As cloture vote after cloture vote (the 60-member threshold vote needed to end debate) failed, Reid grew impatient. He wanted to pull the bill off the floor and move on, said Chris Dodd, then chairman of the Banking Committee.
“There have been times when he’s raised questions about whether or not we can actually go forward, and I’ve had to convince him that I thought we could go ahead and get the bill, but it was right to ask the question,” Dodd told The Huffington Post at the time. “A couple of times on financial reform, when they thought maybe we just ought to go on to something else, when we had so many cloture votes on it, but I and others were able to convince him that no, that we thought we could win the issue and we ought to keep it up.”
With White House backing, Senate Democrats kept it up. Every attempt by Republicans or bank-friendly Democrats to rip out or water down Warren’s brainchild, the Consumer Financial Protection Agency, was met with fierce resistance. “My first choice is a strong consumer agency,” the Harvard law professor told The Huffington Post in March 2010. “My second choice is no agency at all and plenty of blood and teeth left on the floor.”
Meanwhile, in Arkansas, online liberal activists teamed with Big Labor to challenge Sen. Blanche Lincoln in a Democratic primary. Lincoln had long been one of the most conservative Democrats in Congress, and as chair of the Agriculture Committee, she was charged with writing the piece of Wall Street reform that dealt with derivatives.
She shocked K Street and the Washington establishment when, six weeks before her primary, she released tough legislation that tightly regulated the derivatives market. The move sapped her progressive challenger, Lt. Gov. Bill Halter, of momentum. Lincoln beat back most efforts to weaken her language.
The night of Lincoln’s victory in June 2010, a senior White House official got in touch with POLITICO reporter Ben Smith to snipe. “Organized labor just flushed $10 million of their members’ money down the toilet on a pointless exercise,” the official said. “If even half that total had been well-targeted and applied in key House races across this country, that could have made a real difference in November.”
Labor may have lost that specific vote to oust Lincoln, but by taking the fight outside, it won legislative language that strictly regulated trillions of dollars of financial transactions. Considering the end result, the price tag was cheap.
A LOSING STRATEGY
Voters delivered a firm rebuke to the president in the November 2010 midterm elections. Democrats lost control of the House of Representatives, and the president’s health care law proved to be a rallying point for Republican voters. Obama’s top advisers concluded that they needed to demonstrate the appropriate humility.
This attitude only bogged the White House down further within the inside game. The lame duck session saw major victories on a nuclear non-proliferation treaty and an end to “don’t ask, don’t tell,” the longstanding military policy that prohibited gay members from openly serving. But even with the public in favor of letting tax cuts expire on high-end income brackets, the administration bowed to concerns from within their own party and negotiated a deal with Republicans to extend all the Bush tax cuts for two more years.
In strategy sessions, the president and his advisers looked at ways to move various agenda items, from immigration reform to additional stimulus, through a divided Congress. Top officials believed that if they could earn the public’s trust on the deficit and remove that issue from the table, Republicans would join them on other items.
And so, in the spring of 2011, as congressional Republicans threatened to shut down the government unless Democrats agreed to steep spending cuts, the White House looked for middle ground. Without prior warning, then-White House Chief of Staff Bill Daley offered House GOP leadership a higher level of cuts than what congressional Democrats were prepared to offer, according to multiple sources involved in negotiations.
“Our intent was to avoid the shutdown of the government,” Daley told Huffington. “The president was committed to getting spending under control, and that’s why we agreed to the deal that ended up passing.”
Privately, the administration had determined that the president would be hurt badly if the government shut down. Bill Clinton had won that battle in the mid-1990s. But he had benefitted from having a tempestuous Speaker of the House, Newt Gingrich, as his political bete noir.
“[House Speaker John] Boehner was not going to become the enemy,” said one top Obama aide, who spoke on condition of anonymity to discuss those internal deliberations. “He was not going to be the guy who people emoted anger towards.”
The two sides eventually reached an 11th-hour agreement to keep the government open. But the White House’s hope that these types of deficit-reduction negotiations could produce a detente on other items was quickly dashed. House Republicans began plotting how to use a historically mundane vote to raise the debt ceiling as a means of extracting even more from the administration.
For months, the administration believed that the debt ceiling fight would ultimately be resolved with only moderate drama. For all the talk of a frosty relationship between the president and Boehner, top White House aides considered the Ohio Republican a reasonable individual amidst a caucus of crazy. On June 24, 2011, the staffs to the president and the speaker held the first in a series of secret meetings to hammer out a grand bargain.
With barely any input from fellow Democrats, Obama placed sacred cow after sacred cow on the block: massive cuts to discretionary spending ($1.2 trillion over 10 years), gradual changes to the retirement age for Medicare, changes the premium structure for Medicare Part B and D and changes to the way Social Security benefits were paid starting in 2015. In exchange, the White House demanded $800 billion in revenue increases.
As negotiations continued in private, pitfalls emerged on the Hill. A group of senators known as the Gang of Six began reviving their own debt-reduction formula. It had similar features to the deal Obama and Boehner were laying out, but also called for roughly $1.2 trillion more in revenues.
Those Democrats who were bound to have been angered with the president’s proposal, would be apoplectic now, knowing how bad a deal he had struck. The grand bargain was effectively dead. Obama went to Boehner looking for more revenues, but the speaker walked away.
The president had narrowed an inside-game strategy even further, in the hope that direct one-on-one negotiations might be more fruitful. It had nearly worked. Rep. Paul Ryan (R-Wisc.), now the Republican vice-presidential nominee, reportedly warned Boehner that a deal wasn’t just bad policy but would have effectively guaranteed Obama’s re-election. And Obama got credit for his willingness to reach out to Republicans, who, in turn, took a hit in the polls. But his own party was alarmed by what he was willing to give up in the process.
For progressives, the White House’s inability to see the unbending recalcitrance of congressional Republicans remains the biggest, most inexplicable shortcoming of the president’s first term in office. The problem, as Andy Stern, the former SEIU president, put it, was not just that Obama attempted to play the inside game. It’s that he did so time and time again without recognizing the utter pointlessness of the endeavor.
“We were watching the administration lose, and that’s when I think people began to appropriately ask: ‘What in the world are we doing here?’” said Stern, before listing his examples. “The public option, the lack of a plan about deficit reduction, the Republicans’ willingness to take the country over the cliff, and the president trying to cut a back door deal with Boehner as if he was going to be different than the rest of the extremists.”
AN ENGAGEMENT GAP
After the debt-ceiling debacle, the White House’s approach changed. The administration concluded that legislative negotiations with House Republicans would forever be an act of frustration unless they shaped the public debate first.
“You don’t want to date these people,” one exasperated top administration official told reporters on July 22, 2011, the night that the Boehner-Obama deal imploded.
“I think it was obvious by the end of the summer 2011 that the leadership in the House was not going to go anywhere further than the minimum amount needed to avoid fiscal calamity,” explained Daley, who left the White House in early 2012.
Led by economic adviser Gene Sperling and with a push from Axelrod as well, the president turned his focus from debt reduction to job creation. He put together a package of proposals — targeted tax cuts, infrastructure investments, money for teacher retention and first responder hiring, to name a few — and barnstormed the country to build up support.
The administration launched a “We Can’t Wait” campaign highlighting the executive actions the president was taking to stimulate the economy on his own.
“I need your help,” Obama told an audience in Denver in October last year. “Some of these folks in Washington still aren’t getting the message. I need your voices heard. I especially need you young people, I need you guys involved. I need you active. I need you communicating to Congress. I need you to get the word out. … Tell them, ‘Do your job.’”
While the efforts did little to dissolve GOP opposition — only a minor chunk of the president’s jobs bill ended up being passed — the outside game achieved its desired results. Congressional Republicans were left defensive and battered as the president assailed them to pass a year-long extension of his payroll tax cut. Boehner eventually folded his cards, agreeing to extend the rates without requiring spending cuts to offset the cost. It was the type of victory that had escaped the White House for months, if not years.
“I think [the debt ceiling debate] was a watershed event, because it was clear that ... these matters weren’t going to be easily resolved within the four walls of the cabinet room, or the conference room on Capitol Hill,” Axelrod said. “There’s no doubt that the lesson of that was that more, rather than less, public engagement was absolutely essential.”
Suddenly, the image of a president making progress began to emerge. And it was furthered along when he announced his support for same-sex marriage and a new administration policy that would end the deportation of undocumented immigrants who had advanced degrees or performed military service.
But for all that, the engagement gap facing the Obama campaign persists. Much of it is a product of a stagnant economy, which has sapped voters of the political energy they had in 2008. But even Obama’s defenders admit that his time spent governing as an insider has altered the perception of him as a change-agent.
“What you have is an incumbent president who naturally grew into the role of the presidency, away from a fire and brimstone candidate,” said Obama’s old deputy campaign manager Hildebrand, explaining the difference between 2012 and 2008.
Added Delaware Gov. Jack Markell, who has served as a business-savvy surrogate for the president’s re-election campaign: “This is a less romantic time, a less romantic campaign.”
“Maybe [Obama]’s had to do some more things you would term traditional,” Markell added. “But there’s no question his vision is more along the lines of where most Americans are in the terms of a strong middle class. He’s laid out a specific plan to get there, and you see it already, people really feel like he will fight for them more than Mitt Romney would.”
That may be true. Certainly, polls indicate that the public is aligned with Obama on the majority of issues, from Medicare to taxes to foreign policy.
Playing the outside game, however, requires enjoying the fight. As Jared Bernstein said, it means going to someone’s backyard and telling them to their face that they’re wrong. It means using political force to win with a bare majority rather than reaching consensus. It means letting go of the illusion that the Republican Party is looking to work with you.
For Obama, whose brand remains very much tied to the idea that partisanship can be overcome, it remains unclear whether he’s comfortable with that type of politics.
Explaining this spring how he would manage to enact his agenda in a second term, Obama was still looking forward to sitting down and cutting deals. This time, he said, Republicans would be nicer because he’s not running for re-election.
“I believe that if we’re successful in this election, when we’re successful in this election, that the fever may break, because there’s a tradition in the Republican Party of more common sense than that,” he said. “My hope, my expectation, is that after the election, now that it turns out that the goal of beating Obama doesn’t make much sense because I’m not running again, that we can start getting some cooperation again.”
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