The Note, 1/9/09: Obama Pressed From Left on Stimulus

January 09, 2009 8:37 AM

By RICK KLEIN

With the rollout comes the blowback. And with them both comes the presidential-sized challenge for the not-yet president.

It turns out you don’t have to look very hard to find the fault lines in President-elect Barack Obama’s bid for a massive stimulus bill. He tried to scare Congress into acting quickly on Thursday -- and more pressure is coming Friday and beyond -- but there’s still no measure to act on, or even the outlines of one.

Now there may not be one for a while. For the moment, at least, he’s got more to worry about on his left than on his right. (And if leaving Howard Dean feeling snubbed helps sell the package -- please explain how that one works.)

Democrats in Congress, it turns out, have gotten used to having their own ideas. With more questions being raised about billions and bailouts on Friday, it’s only going to get harder for the Obama sales team.

“President-elect Barack Obama’s economic recovery plan ran into crossfire from his own party in Congress on Thursday, suggesting that quick passage of spending programs and tax cuts could require more time and negotiation than Democrats once hoped,” Peter Baker and David M. Herszenhorn report in The New York Times. “Further complicating the picture, Democratic senators said Thursday that they would try to attach legislation to the package that would allow bankruptcy courts to modify home loans, a move Republicans have opposed.” 

“But the broad support he has enjoyed so far for the basic concept is now being tested as the specifics become clearer,” Baker and Herszenhorn write.

“It was a remarkable speech for someone who isn't president yet and hasn't revealed the details of his economic rescue plan,” ABC’s Jake Tapper reports. “The most pointed criticism of the plan came from Democrats who objected to Obama's plans to cut taxes for businesses and for middle class families.”

This is not about losing a vote. It’s about losing a weapon. The stimulus package is Obama’s first big legislative push, the one he absolutely cannot afford not to win, on his terms. Winning in style (think 75 or 80 Senate votes) enhances his power when the hard stuff begins.

Recall that congressional Democrats had a two-year head-start on Obama in taking control of Washington. In that time, they’ve learned to like pursuing paths of their own -- and they remember well what they don’t like.

“The Democrat-led Congress is eager to assert some control and is beginning to chafe at the president-elect's demand for quick approval of a stimulus program pegged at $800 billion and likely to grow,” The Wall Street Journal’s Jonathan Weisman and Greg Hitt report. “The fight could begin to define how Mr. Obama deals with his former senate colleagues. During much of his eight years in office, Mr. Bush dominated Congress in the battle to set the agenda. Mr. Obama will face demand among lawmakers for a more assertive role.” 

ABC’s George Stephanopoulos sees three main questions defining the debate on Capitol Hill: “1) Can the money get out very, very quickly? 2) Will the spending programs really be temporary? 3) Can this package be targeted to create the most jobs per dollar to get the most bang for the buck?” 

Was leading with tax cuts the right call? It’s muted the GOP opposition, but hardly made Republicans enthusiastic. And it’s given some Democrats what’s looking like a rallying point.

This is what happens when you talk about a tax cut bigger than President Bush’s: “Democrats on Capitol Hill questioned the lengths to which Barack Obama was seeking to win over Republicans,” The Hill’s Alexander Bolton reports. Said House Financial Services Chairman Barney Frank: “I have some difference because I think they may be doing too much tax-cutting and not enough direct spending from the standpoint of immediate job creation.” 

“Barack Obama got a lesson Thursday from his old Senate Democratic colleagues: a little more time for takeoff could avoid a crash landing of his economic recovery plan,” Politico’s David Rogers reports. “At a closed-door party meeting in the Capitol, top political and economic advisers to the president elect were met with questions and pressure for adjustments to the $775 billion plan if lawmakers are to meet Obama’s schedule of completing passage by mid-February.” 

Rogers: “In each case, the tone was described as businesslike, more questioning than hostile and even Republicans said later that a plan could jell for all sides. But at this stage Democrats are in too many different places to proceed quickly despite a common belief that action is needed.”

Throw this in the mix: “House Speaker Nancy Pelosi (D-Calif.) is urging the incoming Obama administration to stick to its campaign pledge and immediately increase taxes on the wealthiest Americans, a position that President-elect Barack Obama has wavered on since winning election,” per The Washington Post’s Paul Kane. 

“The individual tax cuts Obama envisions would be permanent. The business tax breaks are meant to be temporary, but you can count on this: Once enacted, some will prove difficult to get rid of,” Scot Lehigh writes in his Boston Globe column. “Even deficit hawks acknowledge that bold action is required in these troubled times. But they rightly say that the focus should be on temporary measures, not permanent (or likely to be permanent) tax cuts. . . . Obama's bid for bipartisanship will only aggravate our fiscal imbalance -- without paying any political dividends when the time comes to get our house in order.” 

David Brooks isn’t sold -- but is plenty sarcastic: “This will be the most complex piece of legislation in American history, and as if the policy content wasn’t complicated enough, Obama also promised to pass it via Immaculate Conception -- through a new legislative process that will transform politics. The process, he said, will be totally transparent. There will be no earmarks, no special-interest pleading. In a direct rebuttal to Federalist No. 10, he called on lawmakers to put aside their parochial concerns and pass the measure in weeks,” Brooks writes in his New York Times column.

“Maybe Obama can pull this off, but I have my worries. By this time next year, he’ll either be a great president or a broken one,” he writes.

Paul Krugman isn’t sold, either: “Mr. Obama’s prescription doesn’t live up to his diagnosis. The economic plan he’s offering isn’t as strong as his language about the economic threat. In fact, it falls well short of what’s needed,” Krugman writes in the Times. “To be sure, a third of a loaf is better than none. But right now we seem to be facing two major economic gaps: the gap between the economy’s potential and its likely performance, and the gap between Mr. Obama’s stern economic rhetoric and his somewhat disappointing economic plan.”

On the other side, relative quiet, for now: “Here's some change you might find hard to believe in,” per ABC’s Jonathan Karl. “Republican congressional leaders Sen. Mitch McConnell, R-Ky., and Rep. John Boehner, R-Ohio, say they like what they are hearing so far on Obama's economic plans.” 

Before he can look forward -- don’t forget that other pot of money: “Confronted with intense skepticism on Capitol Hill over the $700 billion financial rescue program, Treasury Secretary nominee Timothy F. Geithner and President-elect Barack Obama's economic team are urgently overhauling the embattled initiative and broadening its scope well beyond Wall Street,” David Cho reports in The Washington Post. “Geithner has been working night and day on the eighth floor of the transition team office in downtown Washington with Lawrence H. Summers and other senior economic advisers to hash out a new approach that would expand the program's aid to municipalities, small businesses, homeowners and other consumers.” 

“That challenge is underscored by a report from a congressional oversight panel scheduled to be released today that hammers the outgoing Treasury Department for its handling of the financial rescue, including ‘what appear to be significant gaps in Treasury's monitoring of the use of taxpayer money,’ ” Cho writes.

That report is likely to complicate the politics of bailouts: “The recent refusal of certain private financial institutions to provide any accounting of how they are using taxpayer money undermines public confidence,” the draft of the report says. “For Treasury to advance funds to these institutions without requiring more transparency further erodes the very confidence Treasury seeks to restore.” 

ABC’s Chris Cuomo asked panel chair Elizabeth Warren, on “Good Morning America,” does Treasury have too much discretion? “Congress may want to take a very hard look at that question,” she said. “I’ll be perfectly blunt with you: I’m shocked that we have to ask these questions.”

What will Obama do? “There will be a pretty dramatic change in the program,” ABC’s George Stephanopoulos reported on “GMA.” 

Always worth recalling: The real big battles are still far into the future. “For Barack Obama, winning a giant economic revival bill in Congress should be the easy part,” the AP’s Jim Kuhnhenn reports. “For now Obama is using his considerable political muscle and public goodwill to leverage a massive stimulus bill -- big spending, big tax cuts -- to inject adrenaline into an economy in crisis. But he best save a significant part of that political capital if he wants to overhaul so-far politically inviolable programs such as Social Security and Medicare and avert a looming crisis that few Americans now feel or comprehend.” 

Yet notice how broad the stimulus has become -- to include everything from technology in schools to computerized medical records. “If the plan is passed, Obama will get, in one fell swoop, a running start on large swaths of his long-term agenda, the ultimate cost of which no one yet knows,” Time’s Jay Newton-Small reports. 

So, Obama will sell -- leading with labels: “President-elect Barack Obama’s top political aides are adapting their campaign tactics to selling policy, using data from polls and focus groups to shape the debate over a stimulus plan that may cost at least $775 billion,” Bloomberg’s Hans Nichols and Lorraine Woellert report. “David Axelrod, Obama’s chief political adviser, along with campaign media adviser Jim Margolis, are encouraging lawmakers to use the word ‘recovery’ instead of recession and ‘investment’ instead of ‘infrastructure.’ Those recommendations came from focus-group research indicating that such framing would make the package more appealing to voters.” 

Frank Luntz is a fan: “The language he is using is brilliant because it’s future-focused.”

Obama sits down with ABC’s George Stephanopoulos on Sunday’s “This Week,” in an exclusive interview with the president-elect. 

While Obama watches his left -- could it have been a mistake that Howard Dean wasn’t invited to see his successor named?

“If he had been asked to go to that event, he would have been there,” Jim Dean, the chairman’s brother, noted twice in an interview with Politico’s Jonathan Martin. 

Martin: “The conspicuous absence of Howard Dean from Thursday’s press conference announcing Tim Kaine’s appointment as Democratic National Committee chair was no accident, according to Dean loyalists. Rather, they say, it was a reflection of the lack of respect accorded to the outgoing party chairman by the Obama team.”

Obama’s line of praise for Dean probably made it worse (since anyone who knew the first thing about it probably laughed out loud): “He launched a 50-state strategy that made Democrats competitive in places they had not been in years, working with my chief of staff, Rahm Emanuel, to give Democrats a majority in the House for the first time in over a decade.”

The wheels grind in Illinois: Gov. Rod Blagojevich, D-Ill., could be impeached on Friday.

“Paving the way for an unprecedented House vote Friday to impeach Gov. Rod Blagojevich, a legislative panel unanimously approved a scathing report accusing the two-term Democrat of a wide array of offenses, including criminal corruption and wasting taxpayer money,” Rick Pearson and Ray Long report in the Chicago Tribune. “A House vote in favor of impeachment -- as predicted by Speaker Michael Madigan --would be the first ever for an Illinois governor and would send the issue to the Senate for a trial.” 

A hiccup for Roland Burris? “A potentially troublesome new detail emerged about Roland Burris' controversial U.S. Senate appointment Thursday after a state House panel voted unanimously to recommend Gov. Blagojevich be impeached,” Dave McKinney and Jordan Wilson report in the Chicago Sun-Times.

“For the first time, Burris indicated that he asked Blagojevich's former chief of staff and college classmate, Lon Monk, to relay his interest in the Senate seat to the governor last July or September. . . . That testimony appears to differ from an affidavit Burris submitted to the impeachment panel this week in which he stated he spoke to no ‘representatives’ of the governor about the Senate post prior to Dec. 26.”

Obama’s day: A 10:30 am ET press conference at transition headquarters, where he unveils his least intelligently handled pick yet.

“As every previous director could attest, succeeding at the helm at the Central Intelligence Agency requires an uneasy balance: being firm enough to impose a White House agenda without inciting a revolt, while winning allegiance at the agency without being co-opted by its bureaucracy,” Mark Mazzetti writes in The New York Times. “For Leon E. Panetta, President-elect Barack Obama’s choice for the job, the task is made even more difficult because of intense pressure on Mr. Obama from members of Congress and outside groups to hold agency officials accountable for counter-terrorism policies in which the C.I.A. played a leading role.” 

Charlie Cook, on the lack of consultation: “This was more a misstep in congressional relations than a personnel mistake. But good relations with Congress are hugely important, and it will be instructive to see whether the Obama team learns from this goof,” Cook writes in National Journal. “No question, the USS Obama has taken a pair of hits in recent days, but it's too early to say whether this carefully crafted ship has taken on any water.” 

Colin Powell’s role will be defined at a 12:15 pm ET press conference Friday, per the transition office: “General Powell and the Presidential Inaugural Committee will hold a press conference at the Mayflower Hotel this afternoon about President-elect Obama's call to national service.”

Gov. Sarah Palin, R-Alaska, keeps up the fight. This from an extraordinary press release Thursday -- after her entertaining interview with a documentary filmmaker was posted online: “Governor Sarah Palin today expressed dismay at continuing efforts in the media to take her comments out of context to create adversarial situations. Ironically, the latest media eruption concerning the governor came out of an interview she gave to a filmmaker who is creating a documentary on distortions by the national press.” 

“Forget moose -- Sarah Palin is back in Alaska and training her sights on other big game, from Caroline Kennedy to Tina Fey and Katie Couric,” David Saltonstall reports in the New York Daily News. “In an interview posted Thursday on the Web, the former Republican veep nominee complains that Kennedy's blue-blood pedigree will get her softball treatment from the press as she chases Hillary Clinton's U.S. Senate seat.”

Could “pragmatic progressive” be the new “compassionate conservative”? ABC’s Teddy Davis notices Obama using the label to describe himself. 

He didn’t run his letter through spell-check first, but House Judiciary Chairman John Conyers, D-Mich., is organizing opposition to Dr. Sanjay Gupta’s bid to become Surgeon General. (The House, of course, doesn’t get a say in confirmation.)

This is called the double standard: “Senate Democratic leaders won’t shut the door on the possibility of seating Democrat Al Franken before the state of Minnesota issues a certificate declaring a winner in the race,” CQ’s Kathleen Hunter reports. “Senate Majority Leader Harry Reid . . . would not commit to waiting until the state issues a certificate, which, under Minnesota law, can only happen once Coleman’s legal contest is resolved.” 

Reading tea leaves on Caroline: “Her ties to Barack Obama help Caroline Kennedy -- but her lack of political experience hurts her chances of being named to the Senate, Gov. Paterson said Thursday,” Kenneth Lovett reports in the New York Daily News.

Paterson: “She has areas where's she's stronger and areas where she's not, just like the other candidates.”

In a radio interview, Paterson said: “She does not have much political, I mean legislative experience, which is a minus. She has pluses and minuses.”

President Bush gets reflective -- and maybe restless, too: “After eight years of days carved into five-minute increments, each begun with an update on mortal threats to the nation, President George W. Bush said Thursday that he's eager for a more carefree life in Dallas He's just not sure what that will entail,” The Dallas Morning News’ Todd J. Gillman writes.

“The routine is gone,” Bush said, relaxing in a high-backed Oval Office chair, sounding wistful and a bit relieved that soon, the burdens will fall to the next president. “Being a type-A personality, I'm confident I'll be able to fill my days with activities.”

And: “I don't intend to be very political,” Bush said, pivoting to a critique of the Republican Party. “I do know that our party must be broad-gauged, must be for things and not against things.”

New idea, out Friday from the Financial Services Forum: “A white paper, commissioned by the Forum, and to be released [Friday] morning, details two innovative programs designed to help stabilize and stimulate American communities struggling with steep budget shortfalls and falling tax revenues.”

“The Forum’s white paper proposes ‘structural stimulus.’ That is, new government programs that will not just temporarily boost income or demand, but rather will also address long-standing structural deficiencies in the U.S. economy that impede long-run economic growth.”

The Kicker:

“That's called good faith.” -- President Bush, explaining to a group of children that he hasn’t seen his new house in Dallas yet (he left that task to Laura). 

“Katie, you're not the center of everyone's universe.” -- Sarah Palin, on Katie Couric.

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