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Obama and the Economy: What Could Have Been Obama and the Economy: What Could Have Been

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Obama and the Economy: What Could Have Been

If the president wasn't weighed down by the health care debate in his first term, he'd be able to get more of his economic agenda passed -- perhaps, with a Democratic Congress.

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President Obama refocused his agenda on the economy with a campaign-style speech in Illinois.(Susan Walsh/AP)

Six months into his second term, President Obama belatedly addressed the issue most Americans rank as their top concern: the state of the economy. Even though the president campaigned on protecting the financial security of the middle class, the White House hadn't matched it with legislative proposals, focusing more on dealing with crises abroad, health care implementation challenges at home, gun control, even speaking on the George Zimmerman trial.

In his lengthy speech Wednesday at Knox College, the president proposed a handful of new ideas that merit attention: a Community College to Career initiative focused on vocational training, increasing the amount of online education to expand access to expensive colleges, and renewed opportunities for struggling homeowners to refinance at lower rates. But underlying his proposals was an acknowledgement that little would get passed because of GOP obstructionism, pointing to the party's endless votes on repealing his health care law as a prime example.

 

Obama got it backwards. While Republicans may be Obama's biggest obstacle to passing new legislation, the president's first-term focus on passing his health care law all but guaranteed him a vigorous conservative opposition after the next election.

Of course, the White House won't acknowledge the inconvenient truth that pushing through unpopular legislation sapped him precious political capital and cost his party control of the House and a supermajority in the Senate. But it's useful to consider an alternate history of what could have happened if Obama pursued an economy-focused agenda after passing a stimulus in February 2009.

Instead of taking up health care reform in the wake of the Great Recession, the president could have spent his time addressing Americans’ economic insecurity by promoting programs for those finding themselves out of work, struggling to find new jobs, and looking to get back on their feet. By shoring up the banking industry and bailing out the domestic auto industry in the wake of the crises, he helped avert potential economic disaster. But there wasn’t a follow-through to focus on the personal end of the crises, to tackle the pervasive economic pessimism across the country. The speech Obama delivered Wednesday, absent the campaign-style rhetoric, would have been an effective first-term speech, not one nearly five years into his tenure.

 

Imagine if Obama began his presidency pitching an economic opportunity platform focused on, say, expanding job-retraining programs, extending the payroll-tax cut, and streamlining the tax code. Such measures would have showcased Obama's commitment to the economy's health, proving that he could pass legislation to meet his rhetoric. Remember: The president's party held huge majorities in Congress to pass almost anything he wanted, within reason. With Democrats holding 60 Senate seats between September 2009 and February 2010, Republicans didn't even have the opportunity to filibuster, unless they won over disaffected Democrats. With health care reform, Obama chose the path of most resistance, and paid for it both politically and at the expense of achieving other policy goals.

Without the costly haggling over health care, it's reasonable to imagine Obama taking up immigration reform as an alternative path to spend his political capital. In the first term, then-Chief of Staff Rahm Emanuel avoided the issue, worried that the numerous House Democrats in conservative districts would take a pounding at the ballot box in the midterms. With the benefit of hindsight, those fears seem overblown. Democrats lost 63 House seats anyway, leaving behind a caucus overwhelmingly in support of immigration liberalization. The party now views the issue as the GOP's electoral kryptonite, but it probably could have passed comprehensive reform with votes to spare in a first term.

Obama overwhelmingly won Hispanic voters anyway in his reelection, thanks to the GOP's hard-right turn on immigration, Mitt Romney's tone-deaf approach to the issue, and the administration's timely executive order allowing children of illegal immigrants to remain in the country. But he could have little to show for his efforts, with House Republicans unlikely to pass the Gang of Eight bill. Taking up the issue with a Democratic Congress would have been politically contentious, but would have been easier to push through than health care.

In his address Wednesday, Obama said: "With an endless parade of distractions, political posturing, and phony scandals, Washington has taken its eye off the ball." He repeatedly referenced an argument that Washington "needs to be talking about" helping the middle class, even though he's the head of government and has barely used the bully pulpit until now to tackle the subject in the second term.

 

Obamacare secured the president a lasting legacy—for better or for worse—becoming the first Democratic president since LBJ to significantly expand Americans' access to health care. But it's also the origin story of where everything fell apart—how his approval ratings fell back to Earth, how Republicans took back control of the House, and most importantly, the fuel for the tea party's formation.

The White House would never admit they'd trade the health care law for a healthier economy and comprehensive immigration reform. But if the swap included a Democratic-run Congress, it would be hard to turn down. That prospect could have been realistic had Obama approached his legislative priorities differently. In that scenario, however, the president wouldn't have a Republican-held House to rail against—and he seems to enjoy using the opposition party as a foil more than he's willing to admit.

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