By Dan Balz
Washington Post Staff Writer
Friday, February 27, 2009
President Obama's first budget -- with its eye-popping $1.75 trillion deficit, a health-care fund of more than $600 billion, a $150 billion energy package and proposals to tax wealthy Americans even beyond what he talked about during his campaign -- underscores the breadth of his aspiration to reverse three decades of conservative governance and use his presidency to rapidly transform the country.
But in adopting a program of such size, cost and complexity, Obama has far exceeded what other politicians might have done. As a result, he is now gambling with his own future and the success of his presidency.
William A. Galston of the Brookings Institution cited three parallels to Obama's far-reaching program: Franklin D. Roosevelt's 1932 New Deal blueprint, Lyndon B. Johnson's 1965 Great Society agenda, and Ronald Reagan's 1981 call to dramatically limit the size and power of government, which set the framework for public policy debate ever since.
"A consequence of the economic events of the last two years has been to blow up that framework," Galston said. "It has lost substantial public credibility. President Obama now has his chance to make his case for a fundamentally different approach."
But Galston outlined a series of obstacles that stand in Obama's path, beginning with sticker shock. The numbers in the new budget are unlike anything the country and its elected leadership are used to dealing with. Not only will the current deficit reach $1.75 trillion, next year's will also top $1 trillion and the deficits will remain above $500 billion until fiscal 2019, the last year projected in yesterday's document. Will Congress simply choke on the size of those numbers?
Audacity has always been Obama's stock in trade. At stake in this endeavor is the well-being of a nation now in an economic crisis of historic proportions. The president's budget blueprint, which comes after the passage of a $787 billion stimulus package and costly proposals to unlock frozen credit markets and shore up the shattered housing market, demonstrates his assessment that timidity in the face of these problems is a risk not worth taking.
Confronted by economic woes that threatened to derail the already ambitious domestic agenda Obama laid out during his campaign, he has chosen an all-in strategy. He first moved aggressively to confront the current weaknesses in the economy. Yesterday, he showed he is not eager to back away from campaign promises (although Congress may have other ideas) on health care, energy and education. With his new budget, he indicated his belief that both short- and long-term economic problems must be dealt with now, rather than later. As he put it, this is a time to deal with the foundations of the house. But is now, with the economy in such a fragile state, the time to dig at its foundations?
At the White House, his advisers have concluded that the biggest danger in the face of the challenges is doing less rather than more.
It was the same instinct for the audacious that put him into the presidential race two years ago at a time when many urged him to wait. The problems occurring now, however, will test him even beyond the trials he weathered as a candidate. Turning his large, complex and controversial proposals into legislative victories will require not just a bold vision but also leadership of a kind he has not yet been required to demonstrate.
"It's going to take extraordinary leadership, and that's a challenge for the president and those of us who work for the president," senior adviser David Axelrod said yesterday. "These are not ordinary times. They are extraordinary times, and they require extraordinary steps."
When he was elected in November, few doubted that Obama would arrive in Washington with big ambitions to tackle the enormous problems awaiting him. With every step he has taken, including his wide-ranging speech to a joint session of Congress on Tuesday night, he has confirmed those ambitions. But it took the release of his first budget to illustrate the dramatic course change he is proposing for the country after eight years under President George W. Bush and almost three decades since Reagan ushered in an era of smaller government and conservative ideas.
What Obama's budget says is that his priority is to do as much as he can as swiftly as the economic and political climates will allow. With sizable Democratic majorities in Congress and, so far, the goodwill of the American people, Obama has decided to strike. But he has taken ownership of the ailing economy so quickly that retaining public confidence in his ability to get the country out of its ditch will be a key element in mustering the political muscle necessary to achieve his other goals.
Can Obama put together majority coalitions to pass universal health care or a new energy policy? The prospects for health-care reform may be brighter than they were when President Bill Clinton tried unsuccessfully to enact his program in 1993-94, but Obama will still have to defeat the arm of interests and lobbyists that sank Clinton's plan. Can he win passage for a cap-and-trade energy plan that the budget says would produce more than $600 billion in revenue by 2019?
Obama will face increasing partisan opposition to major elements of his plan, even as he attempts to change the tone of political debate in Washington. But he may run into resistance from some Democrats as well, given the size of his ambitions.
Even if willing, can Congress move as swiftly as Obama would like? Axelrod said the goal in the White House is action this year on health care and movement as well on the energy plan. "There are certainly things in here that will trigger a fight," he said. "But as he said when he announced for president, change doesn't happen without a struggle. The easiest thing in Washington is to take the path of least resistance, to tinker at the margins. I think American people recognize we can't do that right now."
Beyond that are tax increases for wealthy Americans, something that Obama campaigned on but that still will require a struggle in Congress. The president not only wants to raise income tax rates for couples earning more than $250,000, but also would reduce the value of their itemized deductions and increase the capital gains tax rate.
"He signaled throughout the campaign that he would cancel some of these Bush tax cuts for the wealthiest and that we would try and add some fairness and balance back into the tax system, and that he would try and protect from additional tax increases couples who are under the $250,000 level," Axelrod said. "He's keeping that commitment."
He added that Obama also will confront the spending side of the budget. But so far, whether as a candidate or as president, he has been far less transparent about where he would make those cuts.
Up to now, Obama's greatest gifts as a politician have been his prodigious talents as an orator, which he has used to inspire the public and generate enthusiasm for his candidacy and his agenda. Those skills were on display again Tuesday night in the House chamber. But there will be as much trench warfare as high-flying rhetoric to turn his program into law. Obama is betting that he has correctly sized up the country and its tolerance for change.
That the Reagan paradigm of conservative governance has taken a beating is indisputable. But is the country ready for government activism of the size and scope he has proposed? "He's really trying to reshape the landscape economically, politically and every other way," said Pete Wehner, a Bush administration official. "If he succeeds, he may be a historic president. And if he fails, he may also be a historic president."
Obama obviously thinks the country is ready for change on a grand scale. If he has misjudged this moment, he could pay a huge price. The president has proved his skeptics wrong, but, as the new budget shows, he is now reaching higher than ever before.