The New New Deal (64 page)

Romney will probably be Obama’s opponent in the fall, and consistency is not his particular hobgoblin. As the governor of Massachusetts, he not only enacted the health reforms that inspired Obamacare—which he now vows to repeal—he supported many of the transformative policies in the Obama stimulus, including electronic health records, tax credits for energy efficiency, and investments in renewables. One of the firms backed by his green-energy government venture fund developed those BigBelly solar trash compactors that the stimulus financed in Philadelphia. But as a presidential candidate, Romney was determined to avoid the fate of Arlen Specter, Charlie Crist, and other moderates scozzafavaed by Tea Party conservatives in Republican primaries.

The new Romney has mocked the Chevy Volt, tweaked Obama’s “unhealthy obsession with green jobs,” and seized on Solyndra as a symbol of the Obama economy. And he has based his candidacy around the Tea Party creed that the U.S. government is an enemy of liberty, redistributing your money to someone less deserving, hindering the job creators who make the economy go. He is framing the 2012 election as a choice between Big Government and Free Enterprise, between a failed president who thinks the economy needs the government to provide stimulus and a successful businessman who knows the economy needs the government to get out of its way.

Meanwhile, Obama is framing 2012 as a choice between We’re In This Together and You’re On Your Own, between bottom-up growth and trickle-down growth, between the president who got the economy out of the ditch and the party that drove it into the ditch—the party whose standard-bearer wants to go back to driving the same way.

I
n 2008, Obama was like a blank slate onto which voters could project their Yes We Can fantasies of change. Now the slate is no longer blank, and voters won’t have to imagine what kind of president Obama would be or what he meant by change. Starting with the Recovery Act, he’s been pretty much the president he said he’d be, even if the immediate results haven’t been what he hoped they’d be.

Ideologically, he’s been a consistent left-of-center Democrat. He’s pursued big reforms rather than school uniforms, and he’s kept pushing for investments in clean energy, medical research, better schools, better infrastructure, and the rest of his New Foundation. But he’s been willing to take the ham sandwich when he couldn’t get the whole hog, and he’s been less liberal than advertised. He chose aides from the corporate-friendly Rubin wing of his party, abandoned “card check” for unions when the business lobby objected, grudgingly extended the Bush tax cuts for the rich, and cut taxes for everyone else. Race to the Top was a real departure from Democratic education traditions, and even when he was adding $800 billion to the national debt through the stimulus, he was always trying to minimize the fiscal fallout. The Recovery Act did end up with a few “tails”—like increases in Pell Grants for low-income students and a more generous Earned Income Tax Credit for low-income workers—but otherwise it has virtually no impact on current deficits. And it did not grow government; public-sector employment has steadily declined.

The rap on Obama in 2008 was that he was a words guy, not a deeds guy, a great communicator but an unaccomplished legislator. It turned out that he was more of a deeds guy. The professor-in-chief has utterly failed to educate Americans about Keynesian stimulus or global warming. He’s also succeeded in injecting record amounts of stimulus and making unprecedented inroads against global warming. Even his partisan critics now admit, to their regret, that he’s gotten a lot done. They portray his stimulus, auto bailout, health reforms, financial reforms, and other achievements as a giant leap toward the Europeanization of America. And even his allies complain that he’s failed to communicate
what he’s done, that he’s let Republicans define him, that his immersion in legislative sausage-making has undermined his narrative of change.

Obama did have two obvious failures that have muddled his message and cast a shadow over his presidency. He failed to change the tone of Washington politics, which remains as rancid as ever. It wasn’t his fault that Republicans settled on a strategy of
Horse Feathers
obstructionism before he even took office, and gleefully compared their stand against the stimulus to Patton’s stand against the Nazis. But Obama was the one who made post-partisan promises he couldn’t keep. Obama also failed to produce a strong enough recovery to return unemployment to normal levels, which meant that everything else he’s done has been couched in caveats. Again, it wasn’t his fault that he inherited an obliterated economy, or that recoveries are always slow after financial cataclysms, or that Republicans blocked more aggressive responses to create jobs. But Obama was the one who promised a stronger middle class and a return to prosperity.

For a long time, Obama’s political advisers didn’t even want him bragging about the accomplishment side of his ledger, fearing that self-congratulation at a time of brutal unemployment would evoke Bush’s premature “Mission Accomplished” banner. But in 2012, Obama has started talking about change again, including the change produced by the Recovery Act. His campaign film, “The Road We’ve Traveled,” included shout-outs to its middle-class tax cuts, infrastructure projects, Race to the Top, and state aid to “keep teachers in the classroom, cops on the street, and first responders ready,” as well as its impact on the free-falling economy that greeted Obama at the start of 2009. The White House has started talking a lot about promises kept, and the stimulus kept a lot of promises—about energy efficiency, renewable electricity, middle-class tax cuts, electronic medicine, early childhood education, scientific research, and more. Some of those investments will start producing more visible change over the next four years, and Obama would like to be celebrating them in the White House.

Obama still avoids the word “stimulus,” but the Recovery Act is at the heart of his case for reelection. It’s central to his explanation of why Americans actually are better off than they were four years ago, even if
they don’t feel so great. It started his New Foundation, and it’s the template for the follow-up investments he hopes to make if he’s reelected. It’s also a handy way to illustrate his differences with Republicans, who marched in lockstep against his recovery plan, and have proposed to tear down his New Foundation in favor of the policies that preceded his arrival in the White House.

Obama hopes to use a second term to consolidate and expand his new New Deal, continuing support for clean energy, implementing electronic health records and Race to the Top, making high-speed rail a reality, shifting the tax code in more progressive directions. Republicans have taken the other side of all those issues, and they are sure to resurrect their failed-stimulus attacks during the campaign, especially if Solyndra returns to the news, or a stimulus-funded company like A123 flounders in the fall. To Obama, the new New Deal is about “winning the future,” rising to our new Sputnik moment, “out-building, out-educating, and out-competing” our economic rivals. To Romney, it’s about “industrial policy,” “crony capitalism,” and government picking winners and losers.

It’s a philosophical and factual debate worth having. But 2012 won’t just be about litigating the new New Deal. It will also be about relitigating the old New Deal.

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omney’s history of flip-floppery has spurred a lot of speculation about the “real Romney.” Is he a true conservative who was just pandering to liberal Massachusetts when he passed universal health care with an individual mandate? Is he a true moderate who was just pandering to Tea Party primary voters when he raised doubts about climate science? Is he somewhere in between? They’re fun questions, but the answers probably don’t matter much. What matters are the policies that Romney has vowed to pursue on the campaign trail, because presidents usually try to keep their promises. The single best predictor of President Obama’s policies has been his 2008 campaign agenda.

Romney basically wants to undo everything Obama has done—from health reform to Wall Street reform to clean-energy subsidies—and return to a pre-Change America. He’s been a bit vague about his other
plans, but his general policies are mostly indistinguishable from Bush’s, except that he wants even deeper high-end tax cuts, and says he wants deep but unspecified cuts in government spending. He’s embraced House budget chairman Paul Ryan’s plan to squeeze Medicare and roll back non-military spending, a Tea Party blueprint that would leave virtually no room in the federal budget for anything but Social Security, health care, and defense within a few decades.

Romney doesn’t have the personality of an angry ideologue, and it’s possible that he does see the Tea Party as a ferret biting the hand that wants to save it from the dishwasher. But a President Romney would still preside over a party fueled by the resentments of its uncompromising Tea Party base. The New Deal notion that the government can help solve national problems or improve people’s lives is anathema to modern Republican dogma. As Obama discovered on his first presidential visit to Congress, Washington Republicans don’t think the New Deal worked. There were hints during the Supreme Court arguments on Obamacare that some conservative justices don’t even think the New Deal was constitutional. U.S. politics has always featured a healthy skepticism of the federal leviathan, but the GOP has defined government spending (except military spending) as an assault on freedom, essentially state-sanctioned theft.

The rising fury about government is curiously disconnected from the facts. Our federal tax burden is the lowest it’s been in decades; Obama made it even lower. The federal deficit is high, but it hasn’t increased under Obama, and it’s got almost nothing to do with the Recovery Act or the bank bailouts that came before it. The Republican rap on the Recovery Act—$1 trillion worth of wasteful earmarks, rampant fraud, political shenanigans, and wackadoodle liberalism—flies in the face of the evidence. But the fury is real. As Rick Santelli wrote after his rant, it’s driven by the suspicion that government is giving your hard-earned money to freeloaders, that Obama’s bureaucrats are picking winners who aren’t you, that Washington is out of control.

Clearly, Romney plans to run against a crippled economy that’s been slow to heal, while Obama will try to remind Americans which party
and which policies crippled it. At a deeper level, though, the 2012 election will be about values, about the purpose of the federal government, about our obligations to each other as Americans. The former community organizer whose rise was assisted by food stamps and student loans will argue that government can be a force for positive change, reining in the excesses of the free market, making strategic investments to help the nation and its people compete. The private equity titan from a wealthy family will make the case that government is the problem, constraining the genius of the free market, interfering with the decisions of “job creators.” Is Uncle Sam supposed to promote great national missions and a spirit of common purpose? Or is he just supposed to keep us safe and protect our rights?

These questions once seemed settled. The federal government gave us land-grant universities and the transcontinental railroad, the interstates and the Internet, the space program and semiconductors. The New Deal established the principle that Americans ought to take care of each other in hard times. Yet here we are, four years after the genius of an unconstrained free market brought the global economy to its knees, still unsure whether government ought to try to reshape our direction or just get out of the way.

It’s a legitimate question. The Founding Fathers would be amazed by the size and scope of today’s federal government. And it’s easy to imagine a pair of data-loving technocrats like Mitt Romney and Barack Obama having a wonky debate about how to make it work better. But the 2012 election will be about whether it can work at all. To Obama, the Recovery Act is proof that the federal government really can work, that it can create jobs and produce change. To Republicans, it’s proof of the exact opposite.

Obama has the facts on his side, but so far, he doesn’t have the public on his side. The stimulus has changed millions of lives, and it’s changing dozens of industries. But politically, what the ARPA-E chemist Eric Toone said about electrofuels applies to the Recovery Act as well: We know it worked. We just don’t know if it matters.

T
his book exists because of Walter Alarkon, a wonderful journalist and a spectacular research assistant. Walter was a star reporter at
The Hill
before I lucked into hiring him, and he’s been getting a law degree at Georgetown University while making this book happen. I’m not sure when the dude sleeps, but I can’t thank him enough for all his terrific work. Walter tracked down countless facts, saved me from countless mistakes, and gave me perceptive advice every day. He gave the first edit of every word in this book. He also did some of the most important reporting in this book, working his congressional sources to help tell the Capitol Hill side of the stimulus story. The roots of the Republican strategy of obstructionism—the bulk of Chapter Seven—grew out of his reporting. The entire book was a partnership, and Walter was the perfect partner—smart, funny, supportive, unbelievably hardworking, and infinitely patient, a self-overrated tennis player but a great guy. I’m glad to be his friend, and I look forward to working for him someday.

I was also fortunate to work again with Simon & Schuster, especially my legendary editor Alice Mayhew, who dispensed typically wise advice and typically hilarious rants about the incompetence of the Obama message machine. Thanks also to publisher Jonathan Karp for his faith in this book, to Julia Prosser and Rachelle Andujar for helping to sell it, and to copy editor Fred Chase, Jonathan Cox, Mara Lurie, and the rest of the S&S crew. My agent, Andrew Wylie, is the best in the business; Scott Moyers was also a delight to work with before he went back to the
editing world. And my pal Ashleigh Lindenauer did a beautiful job with the graphics.