After Policy Stumbles, Obama Turns to Politics

Setting legislative priorities has been one of the chief tasks of American presidents for the past century. Sometimes, they concentrate on changing public policy. At other times, they highlight issues for political reasons, with an eye to the next election.

In his first 14 months in office, Barack Obama worked to change public policy, with partial success. He jammed through the stimulus package in February 2009 and health care legislation in March 2010 on party-line votes.

But he paid curiously little attention to the substance of the legislation. One-third of the stimulus money went to state and local governments – i.e., to public employee unions – which helped ensure that the bill would not hold down unemployment to the promised 8 percent. And the health care bill, we have just learned from Health and Human Services actuaries, is going to increase spending rather than hold it down.

Now, Obama seems to be pivoting toward legislative priorities chosen not for policy but for political reasons.

The pivot is apparent from how he has depicted the financial regulation bill before the Senate. No one disputes that some changes in financial regulation are needed. But the Democratic bill Obama is supporting would, contrary to his sound bites, enshrine rather than end the too-big-to-fail status of the giant Wall Street firms.

The bill does little to change the regulation of the ratings agencies that gave AAA imprimaturs to mortgage-backed securities that turned out to be worthless. And it does not explicitly impose higher capital requirements to clamp down on the huge leverage that made so many Wall Street firms billions and then caused them to crash and seek government bailouts.

Democrats need Republican votes to pass a bill, but have refused to make compromises so they can provoke roll call votes that they can use during campaign season to argue that Republicans are soft on Wall Street. Politics over policy.

In the meantime, Senate Majority Leader Harry Reid sidelined cap-and-trade legislation in favor of immigration reform. Cap-and-trade, passed narrowly by the House in June 2009, had virtually no chance of passage in the Senate. Sidelining it allows Democrats to tell the dwindling number of environment-obsessed voters that they tried to act but were stopped by dirty Republicans – rather than by Democrats unwilling to vote for the bill.

On immigration there are good reasons for changes in policy, but the Democrats don’t even have a draft of a bill. They hope Hispanic and other voters intent on legalizing the status of currently illegal immigrants will be satisfied if they make some noise on the issue – and will be turned off by Republicans if they attack “amnesty” in vociferous talk-radio tones.

The comprehensive immigration bills considered by the Senate in 2006 and 2007 contained guest-worker and border-enforcement provisions that gained the support of some who would not have supported a legalization-only bill. But this time, the Democrats don’t seem to be planning to include such sweeteners.

Moreover, the 2007 bill shifted legal immigration priorities from extended-family reunification to high-skill immigrants. Such a provision makes even more sense now when, with high unemployment, we need more job-creators, not more job-seekers. It’s part of the constructive bipartisan proposal advanced by the Brookings Institution and Duke University’s Kenan Center.

But such an approach would antagonize the Hispanic lobbies. Don’t look for it in the Democrats’ bill. Politics over policy once again.

The Democratic National Committee has released a video in which Barack Obama calls for “reconnecting” with the coalition that elected him in 2008. He appeals to “young people, African-Americans, Latinos and women who powered our victory” to “stand together once again.” Others evidently need not apply.

The policy achievements of the first 14 months of the Obama administration clearly have not energized these voters. Large majorities see the stimulus package as a boondoggle that has failed to revive the economy; solid majorities would like to see the health care legislation repealed. Even the provision that lets you stay on your mom and dad’s health insurance policy until age 26 doesn’t seem to have set young voters’ hearts palpitating.

So if policy doesn’t work, try politics. Gallup reports that “very enthusiastic” voters favor Republicans 57 percent to 37 percent in congressional elections. Will attacks on Wall Street, deep-sixing the cap-and-trade bill and getting beaten on immigration change that? The Obama Democrats hope so. But I wouldn’t bet heavily on it.

The Patriot Post® · After Policy Stumbles, Obama Turns to Politics