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Obama's focus on financial rules, Supreme Court opinion could aid Democrats

By Scott Wilson
Washington Post Staff Writer
Monday, March 15, 2010; A01

Despite holding high-profile meetings last week on energy and immigration reform, President Obama will focus the next few months on two issues that could help his party in November: stronger financial regulations and ways to mitigate a Supreme Court ruling that allows direct corporate spending on behalf of candidates.

Those priorities, although still difficult to achieve in a partisan Congress, are highly popular with the Democratic base and could force Republicans to choose between supporting the president or defending Wall Street when much of the country blames big business for the economic decline.

Such an agenda will give the rest of the legislative calendar, compressed by the midterm election season, a distinctly political cast. It will also push energy and immigration reform, two of Obama's most far-reaching campaign pledges, into the next Congress, which is likely to be more influenced by the Republican opposition.

Obama has been criticized for running an administration where policymaking is too removed from political considerations, a gap seen clearly in drawn-out efforts to close the military prison at Guantanamo Bay, Cuba, and to pass health-care legislation. Even some within the administration's senior ranks have leveled the critique privately.

In public appearances, Obama has asserted that his agenda is free of political calculation, drawing a contrast with a Washington culture he campaigned to change. Speaking last week in St. Charles, Mo., Obama said, "We've seen years, decades, where Washington just puts off dealing with our toughest challenges because it's too hard, because we don't know how the politics works."

But he appears to be doing just that. His post-health-care agenda, described by senior administration officials publicly and privately last week, is far more attuned to the politics of an election year during which his party will be fighting to protect majorities in the House and Senate.

"The president and the people around him are increasingly aware of the political consequences of having pursued comprehensive health care for an entire year," said William A. Galston, a senior fellow at the Brookings Institution who served as national policy adviser in the Clinton administration.

"They believe, and I believe they're right, that Congress's appetite, particularly the Democrats' appetite, for more heavy lifts that will divide the party and antagonize a portion of their constituency is very low," he said. "They want, between now and November, to seamlessly align policy and politics because the alternative would be the certainty of very large losses."

Don Stewart, spokesman for Senate Republican leader Mitch McConnell (Ky.), said the administration's agenda is "surprising, given what citizens are asking for, which is job creation."

"He told us in his State of the Union that priorities Number 1, 2 and 3 are jobs," Stewart said. "I don't think trying to overturn a Supreme Court decision is going to create any."

The White House meetings last week were intended to show a president confident in his ability to secure health-care reform and already pivoting to the next big item on his agenda.

But although Obama expressed a commitment to work for energy and immigration reform, according to the meetings' participants, he did not pledge to take the lead this year. The legislative calendar effectively ends at the August recess, when the campaign season takes over.

Obama had earlier asked congressional leaders to build bipartisan coalitions in support of energy and immigration reform efforts. But Democrats are divided on both issues, making them particularly unappealing in a year when party unity will be important.

On Tuesday, Obama gathered 14 senators from both parties in the Cabinet Room to discuss energy legislation, known as cap-and-trade. Also attending were four Cabinet-rank officials.

According to participants, Obama said he would like the Senate to pass the bill this year, but he made clear it was up to those in the room to come up with the votes. Cap-and-trade legislation, which has passed the House, pits industrial- and coal-state lawmakers against those with strong environmental lobbies.

White House press secretary Robert Gibbs told reporters, "It's got to be more than the president who wants to get something done," adding that "my guess is there will be a clamoring for an energy bill when gas prices go up" during the summer driving season.

Asked what Obama would pursue after health care, Gibbs cited as "big priorities" financial regulatory reform legislation, a push that will coincide with the second anniversary of the financial collapse this fall, and legislation that would roll back portions of the Supreme Court's ruling in Citizens United v. Federal Election Commission.

In his State of the Union address, Obama sharply criticized the court's decision, which allows corporations and unions to spend freely for and against specific candidates. Corporate spending, which until now has had to pass through political action committees, has traditionally favored Republican candidates.

There is little the administration can do to reverse the ruling, short of pushing a constitutional amendment. But White House officials are weighing how hard to push legislative proposals by Sen. Charles E. Schumer (D-N.Y.) and Rep. Chris Van Hollen (D-Md.) that would put some restrictions on corporate participation, such as requiring shareholders to approve political spending by their companies.

On ABC's "This Week" on Sunday, David Axelrod, a senior Obama adviser, warned that the high court's decision could bring about "a corporate takeover of our elections."

"We've got important elections coming up," Gibbs told reporters last week. "And the question is: Are the special interests going to play a bigger role in those with their contributions than they normally would?"

Regarding the stronger regulations on the financial sector working their way through the Senate Banking Committee, Gibbs said that "Republicans are going to have to ask themselves why they would stand in the way of financial reform." He said he is "very confident" Congress will pass a bill this year.

Gibbs said the administration will also pursue "a series of legislative activities" designed to help small businesses and create jobs.

The size and shape of future job-creating measures will probably be left to Democratic leaders on the Hill, given the White House's concern over the prevailing public opinion that Obama is spending too much taxpayers' money on such things as health-care reform and bailing out big banks and automakers.

Modest job-creating initiatives are consistent with the Democrats' election-year strategy of proposing a series of politically popular bills that would force Republicans, whom they have characterized as overly obstructionist, to choose between supporting the measures or explaining their opposition in November.

On Thursday, Obama met first with a group of immigration reform activists and then Schumer and Sen. Lindsey O. Graham (R-S.C.), who are working on the issue. For Democrats, the party splits geographically and philosophically over the best way to manage the 11 million immigrants in the United States illegally.

The president led the meeting with the grass-roots activists, according to participants, and brought along several senior advisers, including White House political director Patrick Gaspard.

"We have the goal of passing it this year," said Eliseo Medina, executive vice president of the Service Employees International Union, who attended the meeting. "I think he wants to get it done this year. But the question is how."

Reform advocates plan to rally across the country Sunday, a way to pressure lawmakers that Obama encouraged in the meeting. But they warned Obama of growing disappointment among Latinos, the majority of whom supported the president in the last election.

In a statement after the meeting, Obama said his "commitment to comprehensive immigration reform is unwavering." He said he is "optimistic" reform will move forward, but he did not say when.

On "This Week," Graham said, "A hastily called meeting Thursday because of a rally next weekend is not unwavering; [it] is CYA," a salty acronym for "covering your [butt]."

"This idea that this administration has been unwavering on immigration reform is just political spin, and the people at the rally ought to know that," Graham said.

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