Obama's Economic Challenge
It was a telling sign that one of the first things Barack Obama did after clinching the Democratic presidential nomination was to hire a new economic policy director, someone who can help him move from the anti-NAFTA left of the party toward the pro-market center that traces its lineage to Clinton administration Treasury secretaries Robert Rubin and Lawrence Summers.
The new economic adviser is Jason Furman, who has been director of the Hamilton Project at the Brookings Institution, a Rubin-sponsored effort to grapple with the country's long-term fiscal problems. Furman says Obama told him he wanted an "honest broker" who could encourage a broad debate about economic policy. "He told me he wants to be eclectic in terms of who he hears from as he makes up his mind about economic issues," Furman told me Monday, after his first day traveling with the presumptive nominee.
The Furman appointment is a classic Obama move. It sends a signal that his economic policies will be consensual, mainstream, bridge-building -- all the qualities appropriate for a president who wants to break down partisan divisions. It's a sign that Obama's policies will involve "Facing the Music," as Furman titled a recent Brookings paper he co-wrote about repairing the fiscal damage of the Bush years.
But will Obama's domestic economic agenda also be exciting and visionary? Will it connect with the country's yearning for fundamental change? That's a much harder question, and it goes to one of the trickiest problems for Obama: Can a candidate who has gathered such a broad tent of supporters also find the intellectual spark that could make him a transformational president? What will he stand for, other than the generic idea of change? What's the cutting edge here?
The Reagan presidency was potent because it was powered by new ideas; the same could be said of the Clinton presidency. But if there is to be an Obama revolution, what will be its transforming economic vision? A program that is centered on "fixing the Bush mess" may be necessary, but it won't energize the country.
Obama's opportunity is unusual, and not simply because he will be the first African American major-party nominee. If he wins in November, he is likely to come to office with sizable working majorities in the House and Senate. That would give him an opportunity to govern that has been rare, arguably not seen since Lyndon Johnson's landslide in 1964.
When you ask senior members of Obama's team how they would use this opportunity to reshape domestic policy, you get the same well-considered answers. They will focus on health care, energy policy and tax reform. Perhaps because those phrases have been repeated in so many Democratic debates during the long primary season, they may have lost some of their galvanizing impact. The trick for Obama will be to make this agenda sound like creating something new and inspiring, rather than just fixing what's broken.
Furman argues the case for remedial change well in his Brookings papers. A July 2007 paper he co-wrote with Rubin makes a powerful economic case for universal health care. The current system, he argued, is putting a strain on businesses, wages and jobs; it is adding to America's fiscal problems and reducing its competitiveness in global markets. An October 2007 online piece argued for cutting corporate tax rates while at the same time repealing the alternative minimum tax to help middle-class taxpayers. An April 2008 column in Slate offered a sensible road map for fixing what Furman calculated was the $4 trillion impact of Bush's tax and spending policies. He stressed honest budgeting, bipartisan efforts to cut the deficit and a presidential willingness to veto budget-busting proposals. Sensible stuff, but not exciting.
To make the repair job sound visionary, Obama may turn to Rep. Rahm Emanuel, the best idea-packager the Democrats have. As a former adviser to President Bill Clinton, Emanuel has been walking a tightrope for months, trying to keep faith with Hillary even as he recognized that Obama was an especially charismatic leader. Now he's able to be all Obama, all the time. Emanuel has argued that the Democrats need "A New Deal for the New Economy," as he titled a March op-ed piece.
Emanuel takes the basic agenda -- health care, energy policy and tax reform -- and dresses it up into a new social contract for the age of globalization. That's the Democrats' challenge now. They have the candidate, but do they have the ideas?