Whither Obama and Congress?

By Steve Kopperud, Policy Directions, Inc.

Now that the dust has settled on the November 2010 elections and the House Republicans are busy naming committee chairs, panel members, and redecorating the former majority’s offices, everyone is over-dissecting the recently completed lame duck session to determine how compliant President Barack Obama is going to be when it comes to his version of bipartisanship, and how committed Speaker-designate John Boehner (R-OH) and his new majority will be to the folks and the issues that gave them the majority to begin with. The Senate, for all intents and purposes, is the same game it’s been for the last four years, just with more opposition players. Its role will be to tackle the issues too prickly for the House and ensure nonsense by either party’s definition does not get traction.

Not to put too fine a point on it, but the lame duck session of Congress was not a political barometer of the next two years. It was, essentially, the GOP’s opportunity to clear the decks of a lot of unfinished business that will now not distract from the new majority’s push over the next two years. For good or not, issues dealt with during lame duck allowed the Democrats to claim some victories; for the Republicans, some major issues were resolved, allowing for a much broader agenda during the 112th Congress.

For the GOP, the big wins included extension of all the President George W. Bush-era tax cuts for a full two years, and a one-year extension, retroactive to January 2009, of a whole shopping cart full of federal business tax credits – including those for biodiesel, renewable diesel, ethanol, and the alternative fuel mixture credit – as well as a reasonable rewrite of the estate tax and a patch for the alternative minimum tax. These are core issues for the Republicans. For the Democrats, they got an extension of unemployment benefits and some ancillary social issues, but they also more firmly entrenched their image as the party of “gimme.” The repeal of don’t-ask-don’t-tell was a throwaway for the GOP; it played to an Obama 2008 campaign promise.

Turning fiscal year (FY) 2011 spending from appropriations bills into a monster continuing resolution is a calculated strategy by the Republicans. Rather than accepting the Democrats’ last hurrah in the spending wars, the GOP punted the FY 2011 spending bills into a system they will control, and the long knives are drawn and being sharpened. The Development, Relief, and Education for Alien Minors, or DREAM, Act defeat in the Senate was a major win for the GOP because now it will control the immigration reform debate.

The White House pretty much took credit for everything and anything achieved by Congress. This is the nature of a first-term president who gets pummeled in a mid-term election. But the bigger question is this: Does the president take a page from the Bill Clinton handbook and move toward the political center to almost guarantee reelection in 2012? Or does he remain a true progressive, keeping his issue papers close to his heart and risk becoming the Jimmy Carter of the twenty-first century? It’s folly to believe Obama does not wish to be a two-term president, so count on the White House becoming less progressive as the next two years wind down to the 2012 national elections.

The House GOP has already thrown down the gauntlet on spending, deficit reduction, and smaller federal government, and these fiscal challenges will be Obama’s biggest headache. If Boehner’s plan to return government discretionary spending levels to FY 2008 levels plays out, Obama is going to watch any number of his pet projects come under increasing fire. To his credit – both fiscally and politically – the president has already signaled his desire to deflate spending, having recommended fairly flat budgets for the last two years and ordering his departments to make additional five percent cuts overall. But the real challenges lie ahead.

How does the Obama administration implement health care reform as enacted if the White House budget recommendation is flat? It must rob Peter to pay Paul, as in it recommends wholesale funding shifts from across the government to pay for the increased administrative and program costs of health care reform. At the same time, this White House is smart enough to watch closely which sections of health care reform are targeted during the House GOP’s aggressive oversight of the health care law, knowing full well the new law carries a whole lot of pork, fat that can be trimmed without damaging the underlying Obama priorities. The key becomes can the White House perform the triage necessary to hold the line with House Republicans and moderate Democrats who believe the entire law is a leap too far by the federal government?

A separate spending challenge for both Republicans and Democrats will be the recently enacted food safety reform law. How does Congress pay for the biggest rewrite of Food and Drug Administration (FDA) authority in more than 70 years? This sets up a seriously ugly appropriations committee battle on both sides of the hill. While the House bill called for a de facto tax on companies required to register with FDA under the new law – they called it a “user fee” and capped it at $150,000 per year per facility, keeping in mind a “facility” is a plant, a separate warehouse, a separate office building, etc. – the Senate bill only authorizes fees for the cost of a recall, the reinspection of a plant, and a voluntary expedited import inspection program or export certificates, all essentially costs that should be borne by business since they emanate from missteps or business development.

The White House has an edge in the appropriations battle because at most the president’s budget is considered a “recommendation” by the appropriators on Capitol Hill. Generally, the president’s budget is dead on arrival the day it hits the hill. The White House can recommend directing money from one end of the federal government to the other, but if Congress ignores that recommendation, then who bears the blame? We call this splendid deniability.

The president has the power of the veto, but I expect he’ll use it only in the cases of serious priorities threatened with extinction. He must be careful because he risks the legacy label: He who condemns our children and grandchildren to lives less bountiful than ours because he spent the government so far into debt it can never crawl out, all for a personal legacy, a progressive agenda, all for the glory of the Democrat Party.

Boehner faces the challenge of putting the money where the GOP’s mouth is, and he and his party face moral/ethical challenges the president does not. Does he scrap great huge chunks of the health care reform law – which recent polls show folks may be warming to, and even his party acknowledges carries some good stuff – in the name of spending and deficit reduction? What does this do to the overall availability of health care for the masses, as in who gets treated and who doesn’t? Does Boehner belly up to the FDA bar and demand dollar increases for food safety regulation, or does he wave the wand of spending control and tell folks to just be more careful in how they handle and prepare their food?

The last couple of paragraphs are kind of snarky, but they illustrate the most cynical and political manner in which both parties will be portrayed. However, both Obama and Boehner are smart people, and very adroit and professional politicians. Both like the jobs they have and desperately want to keep them. Where they differ is that Boehner is a streetwise dealmaker, and the president is someone who reacts better than he initiates.

I look to the White House to covet four more years more than it covets an etched-in-stone party agenda, and for this it will suffer the slings and arrows of its own party. I look to the House GOP to get creative in how it addresses issues while remaining as true to the folks who put them in the majority as the real world of Washington, DC, will allow. Boehner will take major hits if his actions are not as conservative as his words. Neither side will get everything it wants and the spinmeisters will work overtime for the next two years.

There will be much blame placed and much credit taken. Let’s hope those in the real world are the better for it.

View from Washington – February 2011 RENDER | back