Exacting Change

Exacting Change

Obama’s signature economic reforms are under siege. Without a grassroots challenge to business as usual, we won’t get the change we were promised, much less the change we need.


On May 15, House Energy and Commerce Committee chair Henry Waxman and subcommittee chair Edward Markey unveiled the American Clean Energy and Security Act, addressing a priority of President Obama’s reform agenda: the drive for new energy. The bill was both pathbreaking and disappointing, with major compromises from its initial draft. Cuts in carbon emissions that had been pegged at the international standard of 20 percent by 2020 (from 1990 levels) were reduced to 4 percent. Mandates on renewable energy for utilities were slashed. Standards on new coal plants were weakened. Instead of auctioning off pollution permits under a cap-and-trade system (raising revenue to relieve low-income ratepayers and spur investment in clean energy), the bill gives away 85 percent of the permits, with coal utilities, oil refineries and energy-intensive industries like steel getting huge handouts. The subsidies and deals bloated the bill to more than 900 pages, and Republicans introduced so many amendments that Democrats had to hire a speed-reader to get through them. The bill’s fate in the Senate is even more uncertain.

Duke Energy, the Edison Electric Institute and various other energy producers praised the bill, along with some conservative coal-state Democrats. The environmental community split: Al Gore, Environmental Defense Fund and others endorsed the bill as an important first step, while Public Citizen, Friends of the Earth and Greenpeace questioned whether it would spur action toward renewable energy in the short term. “This bill has been seriously undermined by the lobbying of industries more concerned with profits than the plight of our planet,” Greenpeace declared in announcing its opposition.

The climate bill isn’t the only piece of legislation being compromised. Although the major banks are on life support, they were still able to block “cramdown,” the linchpin of Obama’s mortgage plan, which gives bankruptcy judges the right to reset mortgages of families facing foreclosure. That led Senate majority whip Richard Durbin to fume that the banks “own the place.” Credit card companies are less popular than Somali pirates, but they managed to fend off any limit on interest rates they can charge customers.

All of the signature economic reforms the president has promoted–from healthcare to employee free choice–are under siege. Without a grassroots uprising that challenges business as usual in Washington, we aren’t likely to get the change we were promised, much less the change we need.

The Reform Moment

It shouldn’t be that tough. All the stars are aligned for launching the greatest era of progressive reform since the 1960s. We face stark crises that require fundamental structural reform. We have a powerful, popular president with a mandate for change–and a majority of Americans yearning for it. Catastrophes have left conservative ideas discredited, and Republicans are leaderless and divided.

Both houses of Congress enjoy large Democratic majorities with arguably the most liberal caucuses in four decades, if not longer. Nancy Pelosi, the strong liberal Speaker of the House, has helped to define and drive reform (one reason she is the target of withering Republican attacks over her comments on the CIA). In the Senate, normally the graveyard of change, Arlen Specter’s switch and Al Franken’s eventual seating will give Democrats the sixty-vote supermajority needed to shut down filibusters and move legislation. This doesn’t resolve the difficulty of rounding up sixty votes, but it should concentrate the mind of the majority leader, Harry Reid. Democrats can no longer blame obstructionist Republicans for their inability to move. They will be expected to deliver.

Obama, whose watchword is pragmatism and whose gift is for compromise, has clearly grasped the moment. Whether you consider him a “pragmatic conservative,” as Martin Wolf of the Financial Times suggests, or “the world’s best salesman of socialism,” in Republican Senator Jim DeMint’s words, the president has been clear that “we cannot go back to the bubble-and-bust economy that led us to this point.” We can’t “recover” by restoring the old economy–and we should not want to.

Spurning the conventional advice of Beltway pundits to limit his agenda, Obama has acted boldly in response to the crisis. His recovery plan, despite being weakened in the Senate, includes the greatest increase in support for the poor since the Great Society and doubles the federal education budget. His budget calls for dramatic investment in core areas like healthcare and education. (In fact, it is caution, not audacity, that may most retard any recovery and haunt the president, as exemplified by Treasury Secretary Timothy Geithner’s bank bailout.)

Obama has also championed issues that progressives have put on the agenda. He has pledged to move forward on new energy, the Employee Free Choice Act (EFCA), common-sense immigration reform, improved funding for education from pre-K to college and reregulating the financial sector to make it smaller and less destructive.

Together these reforms begin to define a new direction for the country, first steps toward a more just and sustainable economy. Needless to say, the administration’s ability to chart that course will be largely determined by the path of the recession and the success of the administration’s recovery plan, not to mention Afghanistan and Iraq. But these core economic reforms are the centerpiece of Obama’s progressive promise.

In the Trenches

Each of these initiatives rouses the concerns of powerful and deeply entrenched corporate interests. All are mobilizing for a full-scale rumble, deploying legions of Democratic lobbyists and amassing war chests for advertising and “astroturf” campaigns. The healthcare industry tops the list for spending on lobbying in 2009, reporting about $127 million in expenditures in the first three months alone. The lobby’s Swiftboat operation, Conservatives for Patients’ Rights, vows to spend $20 million to scare Americans about Obama’s reforms.

The fight over EFCA “will be Armageddon,” threatens Randel Johnson, vice president for labor policy at the US Chamber of Commerce. The National Journal reports that the Coalition for a Democratic Workplace, a major business umbrella group, alone has committed $200 million to defeat EFCA.

The fierce struggle over the climate legislation is illustrative. According to the Center for Public Integrity, the climate lobbies had four lobbyists for every member of Congress at the end of last year, up more than 300 percent since 2003. The center reports that a staggering 880 groups and interests on all sides are signed up to influence the bill. The oil and coal industry spent about $76.1 million on ads in the first four months of the year, according to the Campaign Media Analysis Group.

Most of the key reforms–healthcare, energy, EFCA and immigration (but notably not finance)–have sophisticated, independent progressive coalitions driving the issue. Health Care for America Now (HCAN) enlists more than 1,000 groups, with a budget of $40 million; it is already on the air urging support in key Democratic states. The unions may spend more than $100 million supporting EFCA, but they will be outgunned several times over. The environmental community mobilizes thousands of activists and has already expended millions on advertising: together, Gore’s Alliance for Climate Protection, the Environmental Defense Fund and the Sierra Club spent $28.6 million in ads over the first four months of 2009. But enviros will be outspent some ten to one in lobbying and three to one in advertising.

The progressive infrastructure built during the Bush years provides Obama with independent capacity that didn’t exist in the Clinton years, from media monitoring to grassroots mobilization. Two new groups–Common Purpose Project and Unity ’09–were set up and staffed by Obama campaign veterans to coordinate message and field operations in support of major administration reforms. They are complemented by the largest new operation of all, Organizing for America, the 13 million-person donor and activist list lodged at the DNC, which can flood House and Senate offices with calls and letters.


Ironically, the key targets for both the corporate and popular mobilizations are a remarkably small number of legislators. Most are Democrats–the handful of conservative “Blue Dog” and DLC representatives and their equivalents in the Senate–plus a few moderate Republican senators who aren’t wedded to obstruction. House Republicans can do little but howl at the wind. The president’s greatest challenge in passing reform is thus garnering support from his own party, not from the opposition.

Obama’s leadership style encourages compromise: he lays out a broad vision, eloquently makes his case and invites all the stakeholders to the negotiations–paying special attention to efforts that forge common ground. For example, the climate bill used as a blueprint the plan released by the US Climate Action Partnership, which brought leading environmental groups like the Natural Resources Defense Council and the Pew Center on Global Climate Change together with giant companies like PepsiCo and Ford and many top energy providers.

Obama then allows Congress to work out the legislation, often counting on Pelosi to ensure that strong committee leaders drive the negotiations. White House aides, marshaled by chief of staff Rahm Emanuel, help to cut deals and build consensus backstage. Citizen groups are called upon to support the resulting legislation and to target swing legislators.

The White House mantra is, Never let the perfect be the enemy of the good. The president doesn’t single out the Democrats standing in the way; he prefers compromise to pitched battle, particularly within his party. A senior White House aide has described Obama as a “raging minimalist,” by which he means someone who believes that you should put all the parties at the table, find out what can be agreed upon and go with that.

Obama’s emphasis on gaining as much consensus as possible, and his reluctance to challenge publicly the interests or legislators seeking to delay or dilute reform, has no doubt won him some support he might otherwise not have had. Corporate trade associations are seeking to shape reforms on climate and healthcare rather than to blow them up. But the emphasis on backstage compromise also weakens the president’s ability to challenge the balance of forces in Congress by mobilizing public outrage. When a compromise is struck, progressives are asked to join the president in supporting it and to mute their criticisms. Passage of the recovery plan and the president’s bold budget outline bear testament to that strategy. And no doubt, whatever progress is made on healthcare or energy or workers’ rights will be in stark contrast to the black hole of the Bush years.

The danger is that this process may make the weak the enemy of the good. Legislated reforms always reflect the gulf between what is needed and what is possible. That gulf is very wide despite the economic crisis and the sea-change elections, because corporate lobbies still hold sway in Washington. Many Congressional liberals worry that there isn’t enough push to overcome the opposition, particularly in the Senate. We could see a series of reforms with the heart cut out of them–healthcare without a good public plan, energy without strong cap-and-trade and renewable energy standards, EFCA without card check or binding arbitration–and immigration may not even make it to the table. To change that balance, the president may have to put his popularity on the line–or citizens may have to change the terms of the debate.

Compromise is inevitable. The hard question is whether the compromise opens the door to greater progress or forecloses opportunity. A weak public plan will make it hard to get healthcare expenses under control while extending care to all. Timid cap-and-trade standards won’t spark the drive for renewable energy or substantially reduce carbon emissions. Without significant reform, workers’ ability to organize won’t improve all that much.

Moreover, the reform moment may not last long. Given the economic devastation and the wars abroad, the president’s popularity is more likely to decline than to rise. Parties in power tend to lose seats in the first midterm election of a new presidency. If unemployment is still increasing next year, as seems likely, the Republican opposition could find its voice. Conservative Democrats and their corporate allies could grow bolder. And as bankers are bailed out while autoworkers get their pink slips and an increasing number of homeowners receive foreclosure notices, citizens could become disillusioned with the party in power.

The Progressive Challenge

Obviously, progressives can have the greatest impact by mobilizing voters to challenge those who stand in the way of reform. Legislators too often are more attuned to the needs of their donors than to those of their constituents. Many conservative Democrats seem wedded to old arguments, oblivious to the impact of the crisis on the people they represent. Independent organizing can have a significant effect, particularly in a time of dramatic change.

To forestall crippling compromises, reform coalitions must define the scope of the campaign early. Clear red lines must be drawn around the heart of the reform, putting everyone on notice that compromise beyond a certain point is a deal-breaker. Progressives should also be exposing the lobbyists, pointing out the parochial concerns and wrongheaded ideas of those opposing change, and mobilizing support in targeted states and districts. The pain of standing in the way should be made greater than the benefit.

HCAN has exemplified this strategy. The coalition helped to introduce comprehensive healthcare reform into the presidential campaign–itself a compromise from the single-payer plan designed to appeal to the 90 percent of voters who have some kind of coverage. HCAN then focused on the public plan, detailing its importance and anticipating that the insurance companies and Republicans would target it. When key Senate Democrats like Max Baucus and Ben Nelson began raising doubts about the public plan, HCAN worked with Progressive Caucus leaders to change the calculus. The caucus polled its members and released a statement that the majority of them would vote against any reform that did not include a strong public plan. They were soon joined by the Hispanic, Black and Asian-American Caucuses. At last count, more than 100 liberals have pledged to vote against any reform without a public plan. This provides a counterbalance in the negotiations and may help stiffen the leadership’s spine. At the same time, HCAN has sponsored ads in recalcitrant legislators’ districts, often singling them out by name.

The Obama administration prizes coordination of message and mobilization, and prefers that disagreements be aired in the back rooms rather than in the streets. White House aides argue that going after legislators–particularly Democrats– publicly could make it harder for the administration to deal with them. This is, of course, particularly true for Organizing for America, run out of the DNC. But conservative legislators are likely to be skeptical of any White House claim that this most popular president couldn’t curb the activities of progressive groups if he chose to.

At this point, most of the national constituency groups–labor unions, environmental groups, MoveOn–have organized independently to drive their causes. But they’ve chosen to co-operate with the White House, often muting disagreements on message or tactics.

Driving Progressive Change

The fate of the climate bill, cramdown, credit card and healthcare legislation, along with the fight over the rest of the agenda, suggests the limits of this strategy. Clearly, the balance of forces remains biased against significant reform. With Republicans committed to obstruction, only a few Democrats are needed to force major concessions or block key legislation.

We need a grassroots uprising against business as usual in Congress. The White House won’t find it easy to spark that and may not support it. But without a movement that exposes legislators to the fury of their constituents, and challenges the cozy relationships between moneyed interests and incumbents, we risk blowing the greatest moment for reform in decades.

Moreover, independent organizing is vital because Obama’s agenda–as he admits–is a beginning, not the end. Though it is ambitious, it is, not surprisingly, both imperfect and incomplete. Although reluctant to challenge a popular president, progressives have begun to question some of his initiatives. Joseph Stiglitz, Paul Krugman and a range of economists have criticized the bank bailout and sounded a call for a second round of stimulus spending. Fifty-one progressive House members voted against funding for escalation in Afghanistan, and many are calling for a clear exit strategy. And when Obama reversed his position on military tribunals and releasing the torture photos, this magazine and the human rights and civil liberties community responded with an uproar.

We also need to expand the agenda for reform. For example, if we are to make the investments vital to our future, as the president has called for, a sustained expansion of public investment is essential–and that will require a far bolder tax policy. Under current projections, domestic discretionary spending will decline to the lowest percentage of the economy since the early 1960s. We need a campaign for sustained investment linked with progressive tax reform to pay for it, featuring a higher rate for high-income earners, a tax on stock transactions to limit speculation, a crackdown on tax havens and taxation of income from wealth at the same rates as that from work.

Similarly, Obama has largely embraced America’s role as GloboCop and calls for sustaining military budgets that are nearly as large as the rest of the world’s combined. As the escalation in Afghanistan indicates, the American posture virtually guarantees involvement in constant wars and interventions across the globe. Changing this unsustainable strategy will require creative thinking about security and how to argue for it.

The struggle over financial regulation has only begun. The contrast between the treatment of bankers and the treatment of autoworkers and suppliers–between those, in Steelworkers president Leo Gerard’s phrase, who shower before work and those who shower after work–has not gone unnoticed. Congress has passed legislation to set up an independent commission with subpoena power to detail what went wrong in the financial collapse and demonstrate the fraud, greed and regulatory malfeasance that drove us into this mess. Progressives should be pushing hard for aggressive hearings to help provide the popular mandate for fundamental reforms: restructuring firms “too big to fail,” limiting leverage, outlawing exotic financial instruments, controlling consumer and credit card gouging and returning finance to its position as the servant, not the master, of the Main Street economy.

At the beginning of the administration Rahm Emanuel famously said, “You never want a serious crisis to go to waste.” With Obama’s leadership, Washington will produce reform. But even with coordinated efforts to support his agenda, it is likely to be deeply compromised unless an independent movement challenges business as usual and forces far bolder changes than Washington now thinks possible.

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