Tone May Be Key to Obama's Agenda
Success May Hinge on Changing Status Quo

By Shailagh Murray and Paul Kane
Washington Post Staff Writers
Sunday, January 4, 2009

Rarely have lawmakers confronted an agenda as ambitious as the one Congress will face upon convening this week, with an incoming president pushing to stabilize an economy on the brink of long-term recession, to create universal health coverage and to overhaul federal energy policies.

There are signs that the usual divisions that send so many ambitious bills down to defeat will confront President-elect Barack Obama in his first weeks on the job. Some Republicans are spoiling for an early policy fight that will test Obama's mettle. Conservative House Democrats want to include statutory deficit-reduction language in a economic stimulus package that could cost $1 trillion. And Senate centrists have warned that the incoming administration's ambitious global warming legislation might be a non-starter.

Over the past 15 years, during which a large majority of current lawmakers were first elected to Congress, partisan feuding has reduced Congress's output to a bare minimum of must-pass measures. Party-line voting peaked during the Bush presidency, while productivity slumped. In 2008, the Senate voted the lowest number of times since 1951, according to a Congressional Quarterly survey.

With Republicans holding just enough seats to put the brakes on sweeping initiatives in the Senate, the fate of Obama's agenda may rest on his ability to deliver on another campaign pledge: to change the way Washington does business by adopting a more pragmatic and inclusive governing style. And as the nation's economic woes deepen, there are early indications that lawmakers may be willing to put aside precedent, as the incoming administration -- at least so far -- sends welcome signals to key constituencies.

"I'm encouraged by their talk. But their talk has to be followed up with action," said Rep. Baron P. Hill (D-Ind.), co-chairman of the Blue Dog Coalition, a group of 47 fiscally conservative House Democrats.

Rahm Emanuel, who recently resigned his House seat and will serve as Obama's chief of staff, said that a shift in sentiment is palpable and that the new administration plans to take full advantage. Lawmakers sense that the need for action is urgent, Emanuel said, and they recognize that Congress's dismal approval ratings will make them easy scapegoats if the gamesmanship continues. "You never allow a serious crisis to go to waste," Emanuel said. "People sense that we're at a different moment in time, and that you have to put aside preconceived notions and partisanship to solve problems."

Committee leaders in both parties worked through the holidays on several initiatives, including a mammoth overhaul of the health-care system that is moving on a faster track than Obama officials had anticipated, and the stimulus bill, which lawmakers hope to have ready for the new president to sign soon after his swearing-in.

Republicans will hold at least 41 Senate seats, enough to filibuster if they maintain discipline in their ranks. Soon after the election, Obama began to reach out to individual Republicans through phone calls and meetings led by Emanuel. Tomorrow the president-elect will meet with Senate Minority Leader Mitch McConnell (Ky.) and House Minority Leader John A. Boehner (Ohio), who have expressed skepticism about the cost, scope and timetable of the stimulus plan.

Senior Democratic aides said they are prepared for Obama to push for Republicans to be included in major policy negotiations, starting with the stimulus, as they unfold. The goal is to set a precedent with the economic package and store goodwill for subsequent battles.

"We are not going to be hampered by ideology in trying to get this country back on track," Obama said at a post-election National Governors Association meeting in Philadelphia. In his radio address yesterday, he spoke of the stimulus -- which he labeled the American Recovery and Reinvestment Plan -- almost in apolitical terms. "I am optimistic that if we can come together to seek solutions that advance not the interests of any party, or the agenda of any one group, but the aspirations of all Americans, then we will meet the challenges of our time, just as previous generations have met the challenges of theirs," Obama said.

Sen. Charles E. Grassley (Iowa), the ranking Republican on the Finance Committee, is one of many GOP members eager for Congress to act big, for a change. He has spoken by telephone with Obama, a "welcome conversation," as the veteran lawmaker put it. But Grassley also is a realist, saying his party would be wise to reexamine its tactics.

"There's a reality for Republicans that with lesser numbers, we're going to have to pick and choose where we draw the line," Grassley said. He predicted, "There won't be as many lines drawn as in the past."

As useful as GOP support could prove, Obama also is trying to become the first Democratic president since the mid-1960s to forge an effective working relationship with a big congressional majority of the same party. The last two Democratic presidents, Jimmy Carter and Bill Clinton, saw their party leaders on Capitol Hill turn against them, leading to electoral disasters for the party in 1980 and in 1994. An energy crisis helped to do in Carter, while a failed health-care proposal contributed to a Republican congressional landslide two years into Clinton's first term.

Obama will try to address both those issues while managing the largest global financial crisis since the Great Depression, along with the beginning of a U.S. troop withdrawal from Iraq.

But the economic downturn will represent the first test of Obama's relationship with congressional Democrats, potentially pitting him against the party's formidable wing of fiscal conservatives.

Leaders from both chambers sat down to work out details in meetings at the Capitol beginning in mid-December. With House Speaker Nancy Pelosi (D-Calif.) staking an early position in favor of a $500 billion stimulus, Obama's advisers spread the word that their plan would probably approach $850 billion.

Those numbers sent sticker shock through the Blue Dog caucus, which has crusaded for federal deficit reduction and which represents a large enough force to block just about anything, particularly if Republicans hang together in opposition.

After discussions with Emanuel and other top Obama advisers, Hill said, the caucus's leaders decided to "set aside our strong feelings about deficit reduction" to support the plan, but with some conditions. The group wants to insert statutory language in federal law instituting pay-as-you-go rules, which require spending cuts or tax increases to offset new federal programs.

When Democrats took control of Congress after the 2006 elections, Pelosi instituted House rules that required a "pay-go" principle to be considered. But they were routinely flouted over the past two years as the Bush White House objected to tight fiscal constrictions. In meetings after the November election, Obama advisers raised the idea of making pay-go a federal law, suggesting that Blue Dog demands would probably be met. But the president-elect's team has not specified how, and more importantly when, such a rule would take effect.

With no answers yet, Hill said he has been tasked by congressional leaders with crafting language defining emergency situations in which pay-go rules could be ignored. Despite the economic crisis, many Blue Dogs are seeking early imposition of pay-go rules, even if it creates problems for funding initiatives such as health-care reform that Obama has argued are key to the nation's recovery.

Overhauling health care, to make it more efficient while extending coverage to more people, may represent Obama's biggest policy challenge. But he may have advantages that Democratic presidents lacked in the past.

Obama allies are pushing the idea that a federal health-care solution is not a threat to the nation's fiscal stability but part of the solution because of its potential to unlock business growth, create jobs and ultimately provide cheaper care for more Americans.

"I really am optimistic, although pragmatically optimistic," said Chris Jennings, who represents health-care clients and was a longtime adviser in the Clinton White House. "There's a greater receptivity than there ever was, because people feel extraordinarily insecure right now."

Senate health committee Chairman Edward M. Kennedy (D-Mass.) started to lay the groundwork for a comprehensive bill in the summer, and Republican and Democratic leaders have met for months as they begin to hash out a collective approach.

Some preliminary health-care measures are likely to end up in the stimulus bill, including a down payment on converting all medical records to an electronic format. Other immediate priorities for the short term include an expansion of the Children's Health Insurance Program and reauthorization of Medicare physician payment rates.

"I'm going to be working on health-care reform from the get-go," Senate Finance Chairman Max Baucus (D-Mont.) said in an interview. "We can't lose momentum here."

By Obama's estimate, his proposal to move toward universal coverage would cost almost $65 billion a year, and his original plan was to finance it by raising taxes on the top 5 percent of income earners. But in recent weeks, the president-elect has raised the possibility of waiting for the Bush tax cuts to expire, rather than repealing them, which would drain some funding for his health-care initiative.

That could sour some deficit hawks on the idea. "It's going to be very problematic to me unless they can tell me how it's going to be paid for," said Sen. Ben Nelson (Neb.), a leading centrist Democrat.

Energy and environmental issues represent areas in which Democrats have high public approval but many competing ideas. In a mid-December Washington Post-ABC News poll, 84 percent of voters said Obama should push a federal program to rein in emissions from electric companies while funding more renewable energy resources. After the economy, the issue rated as the highest in priority when voters were asked what they wanted Obama and Congress to tackle.

As a candidate, Obama advocated a 10-year, $150 billion plan to fund private efforts to find cleaner-burning renewable resources, in the hope of reducing reliance on foreign oil.

But he is almost certain to face resistance to another proposal, to reduce emissions, particularly from coal-burning power plants in the Rust Belt. He supports a "cap-and-trade" policy that sets emission standards for all companies but allows those with larger emissions to buy credits from companies that burn less. Similar legislation has met with failure in the Senate, where it received 48 votes in June, a dozen shy of the 60 needed to clear a filibuster by lawmakers who say the policy would result in higher short-term energy costs for consumers.

The good news for Obama is that some potential foes are willing to approach old debates with a fresh eye. Sen. Judd Gregg, the ranking Republican on the Budget Committee, is one GOP agitator who said he is encouraged by the burgeoning bipartisanship.

"The opportunity is there, but it's going to take a real diplomatic effort and effective procedure and leadership to pull it off," Gregg said. "You don't have to get too far into the waters of these issues to start aggravating the sharks."

Staff writer Ceci Connolly contributed to this report.

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