The Next Two Years
Well, as they say, by tomorrow night it will be all over but the shouting. And I suppose, as a result, we can expect much shouting as Republicans in Congress celebrate their grip on two branches of the federal government and attempt to parlay it into a winning hand in 2016.
Of course much bad, very bad, public policy can be expected. The new reactionaries that run the GOP care little about governing and much about acting out their perceived grievances. Even if we thought that the President would oppose the bulk of it, he would have to be a considerably better politician and have a much stiffer spine than he has demonstrated in the past six years to pull it off.
Six years ago! Remember then? The President had control of the House and a veto-proof Senate (once Franken was seated). But we got a sneaking suspicion that that would soon evaporate within the President’s first month in office. Two blunders, one on policy and one on politics, made tomorrow’s total loss of the Congress nearly inevitable.
The policy blunder was his swallowing, wholesale, the neo-liberal economics of the Clinton era. During the campaign, candidate Barack Obama’s quick assent to the Troubled Asset Relief Program (“TARP”) made him look presidential and decisive at a time when John McCain was dithering. In retrospect, however, the decision and the method used to arrive at it seem more like a reflection of his lack of interest in economic policy-making and his instinctive deference to “elites.” TARP was unable to secure enough Republican votes first time to pass. Republicans balked at the price of the bailout to giant financial institutions. The Democrats, however, were committed to the program because of the assent by their party leader. It is no wonder that so many people believe that TARP was a Democratic rather than a Republican plan. Next, when it came time to propose a stimulus package for the economy, the President’s loyalties became apparent. Although he had the immense political capital from his landslide election and substantial majorities in both Houses, the President proposed a spending amount that liberals and leftist economist nearly universally regarded as inadequate. Even so, in order to secure Republican votes, he watered the bill down even further by making a third of the amount go to tax cuts rather than stimulating expenditure. (The bill got no Republican votes anyway.) The kicker was appointing the conflicted and inadequate Timothy Geitner to the Treasury. When the president summoned the heads of the large banks to the White House for an early meeting, they feared the worst. Instead the President and Geitner calmed their fears by assuring them that everyone was on the same side. The banks never looked back and used the TARP program for their own purposes including bonuses and acquisition of other banks, rather than commercial lending, the purported purpose of the program. Although the President never received any cooperation from any of the banks, the public hung TARP around his neck, and the Republicans were able to carve him as a “socialist.” The 2010 Tea Party assault on the House followed these policy mistakes like night does the day.
His political blunder was in filling his cabinet with Democratic politicians that would better have been left to run for Senate. For Vice-President and Secretary of State the President selected two sitting Senators (and but for the lack-of-grace of the Tea Party the Democrats would have lost a Delaware seat as a result). And crucially he selected three up-and-coming, popular Democratic governors who likely would have made a run for Senate in three important states in which they had a substantial shot of winning: Janet Napolitano (then sitting governor of Arizona) for Homeland Security, Tom Vilsack (highly popular two-term governor of Iowa) for Agriculture and Kathleen Sibelius (highly touted governor of Kansas) for Health and Human Services. Of course today having an incumbent defend Iowa or Kansas would have been important. (The Democrats are so depleted in Kansas that they withdrew their candidate in favor of an independent who refuses to say which party he will caucus with.) And McCain had no serious threat at a time when he was vulnerable and so could continue attacking the President while sliding to his right to prevent an upset in the primaries. Moreover, aside from Vilsick (who remains Agriculture Secretary), the association with this Administration seems to have permanently damaged their political careers. (And it’s unlikely that Vilsick is destined for great things after his stint with this Administration.) Some Presidents have used the Cabinet to build future party stars. This one took current stars and cashiered them. The President also involved himself in Senate primaries, back moderates against populists and progressives. His influence to get Specter to switch parties brought into the party an ardent opponent of the unions’ number one issue, card checks. But the political gurus at the White House steamed ahead, backed Specter against a real Democrat in the next primary. While Specter lost, the damage was done and the Democrats lost that seat to a right-winger in the general election.
So the President is at least partially responsible for the disaster that will take place on tomorrow. And I think that aside from the embarrassment, there are probably good reasons for the President not to feel overly upset about the imminent right-wing control of government.
First, the President is avowedly “bipartisan.” The only way you can convince yourself to take that position in these polarized times is to have no real deep-seated belief in policy positions. He has never been comfortable taking a leading position on any liberal or left-leaning issue. When he occasionally makes feints in that direction, he quickly trims his sails. For example, recently the President called income inequality the “defining issue” of our time. As soon as he discovered that Krauthammer and his “pundit” friends were calling this talk “class warfare,” we soon heard of it no more. The President with this new Congress will now have the luxury of taking positions, “chiding” Congress, without any responsibility of fashioning a bill or using the office to shepherd it through. This should allow for a lot more empty progressive talk. Supporters like Bill Maher happy.
As for the President, he probably will be happy about the new reality beginning next year because he won’t have any real Democratic check on two issues that might establish his legacy. And those issues will benefit the group that in retrospect our center-right president seems to have been overly solicitous from the beginning: the very wealthy, particularly the rentier class.
The first opportunity will be to implement the “grand bargain” that was once illusive. He can achieve the goal balancing the budget some time in the future (a cherished desideratum of the Beltway talking heads) by “fixing” (i.e., damaging) Social Security. The President once struck a bargain to this effect with John Boehner, before the Tea Party cabal in the House cut off Boehner’s knees. The President was then willing to reduce “entitlements” knowing that he would have resistance from a Democratic-controlled Senate. With that brake gone, so will be his inhibitions. The Tea Party made a serious mistake in scuttling that deal. It would have been a huge success for them to get a Democratic President to take an ax to Social Security. Not only would it possibly be the first step over a slippery slope, it would have greatly dampened the view that it is the GOP who was dangerous on that issue. The Tea Party, of course, is motivated by its race-influenced personal distaste for the President to the point of irrationality. But it is possible that House leadership can now fashion the issue differently for them, particularly if the President makes the deal even more one-sided in their favor, which given his bargaining history is almost certain. As for the President’s motivation, we know that he is greatly devoted to Beltway punditry and their brand of policy-and-fact-free centrism. There is nothing better for him than to be considered “serious” or “thoughtful” or “realistic” by David Brooks or the like. To be hailed as the President who rose above party to “set our fiscal house in order” would be about the best legacy this lame-duck President could hope for. If the deal did enough damage to the social safety net, the Tea Party might hold its nose and vote for it. A GOP Senate certainly will.
The second opportunity is on a little discussed issue that will probably result in the greatest damage to this country by this Administration (which is saying something as the list continues to grow). That is the little discussed issue of trade agreements. The person least happy to talk about it is the President himself, because it represents another of his reversals from campaign promises. Those who care to remember what Candidate Obama said will recall that he claimed as president he would open up NAFTA to renegotiation. And well he it should have. The NewYork Times, once a major supporter of all-out free trade agreements, explains how NAFTA has harmed our economy and helped create that income inequality that the President once briefly decried:
“At Nafta’s core — and proposed for the T.P.P. — are investor rights and privileges that eliminate many of the risks that make firms think twice about moving production to low-wage countries. Today, goods once made here are being produced in Mexico and exported here for sale. Indeed, American manufacturing exports to Mexico and Canada grew at less than half the rate after Nafta than in the years before it.
“As a result, our trade deficit has ballooned. In 1993, before Nafta, the United States had a $2.5 billion trade surplus with Mexico and a $29 billion deficit with Canada. In 2012, the combined Nafta trade deficit was $181 billion, even as the share of that deficit made up of oil imports dropped 22 percent. The average annual growth of our trade deficit has been 45 percent higher with Mexico and Canada than with countries that are not party to a Nafta-style pact. The companies that took the most advantage of Nafta — big manufacturers like G.E., Caterpillar and Chrysler — promised they would create more jobs at their American factories if Nafta passed. Instead, they fired American workers and shifted production to Mexico.
“The Labor Department’s Trade Adjustment Assistance program, which documents this trend, reads like a funeral program for the middle class. More than 845,000 workers have been certified under this one narrow and hard-to-qualify-for program as having lost their jobs because of offshoring of factories to, and growing imports from, Mexico and Canada since Nafta.
“The result is downward pressure on middle-class wages as manufacturing workers are forced to compete with imports made by poorly paid workers abroad. According to the Bureau of Labor Statistics, nearly two out of every three displaced manufacturing workers who were rehired in 2012 saw wage reductions, most losing more than 20 percent.”
But once the President took up with his neo-liberal friends from the Clinton Administration he decided that NAFTA wasn’t that bad after all. The rentier class benefited, so all was well. And now he wants to increase the wealth of the wealthy even more, by negotiating a similar treaty with Pacific Rim nations, the Trans-Pacific Partnership (“TTP”), and another with Europe. But Free Trade agreements can never survive ordinary legislative scrutiny. This is because they contain things that Americans are solidly against. Things like allowing jobs to be exported to countries with low wages,, no unions, no workplace safety and no environmental regulations. Even conservatives have a hard time voting for them because they want to get re-elected. So the trick that has be used is the so-called “fast track” legislation which allows the President to negotiate a treaty that will be submitted to Congress for an up-or-down vote, no amendments permissible. What is left of the former liberal-union alliance is adamantly against the TTP, because past history has shown how bad such treaties are for labor and the middle class of this country. So even though fast-track legislation was introduced in January, Harry Reid has prevented it from coming up for a vote. When Reid ceases being majority leader, so will the old on fast-track legislation.
Of course there is no guarantee that the Tea Partiers would want to give authority to the President, but there is probably little risk that this President would negotiate a liberal trade agreement (if there is such a thing). In any event, the Administration will probably give them enough in spending slashes or tax reductions to buy their votes.
So here are two more things to look forward to, in addition to the gutting of Obamacare through budget reconciliation maneuvers, when the anti-government party is in charge next year.