Obama Gets 'Incomplete' as Decisions on War, Joblessness Loom
Oct. 23 (Bloomberg) -- L. Sonny Young usually hosts up to 20people on Sundays at his Springfield, Ohio, barber shop to makecalls for President Barack Obama’s health-care overhaul. Lastweek, only three people showed up.
“People are getting tired,” said Young, who used his shopto organize support for Obama’s presidential campaign inhistorically Republican Clark County. “We need to move it on,just step it up,” he said of the administration.
Young gives Obama credit. He quelled the worst financialcrisis since the Great Depression. He passed a record $787billion stimulus package and made more progress on health-carelegislation than any president in more than 40 years. He alsorepaired the U.S. image abroad and earned a Nobel Peace Prize.
As the 63-year-old Ohioan suggests, all that could proveephemeral if Obama can’t reverse an unemployment rate that hasrisen to a 26-year high of 9.8 percent, cut a budget deficitthat stands at $1.4 trillion, remake the U.S. health-care systemand produce a winning strategy for Afghanistan.
“In virtually every area that matters, the honest grade forthe administration would be an incomplete,” said Bill Galston,a scholar at the Washington-based Brookings Institution who wasa domestic policy adviser to former President Bill Clinton.
Obama is a victim of both circumstance and his ownaspirations.
Obama’s Goals
Even facing the worst financial crisis in decades, hepressed for revamping the U.S. health-care system that accountsfor one-sixth of the economy. Two Senate committees and threeHouse panels have passed different versions of the legislation.Both chambers are working to meld their respective plans andremain split on key aspects of the bills, such as a publicinsurance option to cover the uninsured.
The new administration also has invested in clean energyand put in new fuel efficiency standards for cars while waitingfor Senate action on climate legislation. Obama’s team also ispressing Congress to approve the most far-reaching revamp offinancial regulation in 75 years in a bid prevent anothercrisis. The efforts have been stalled in the face of oppositionfrom the financial industry.
Internationally, he’s weighing whether to send anadditional 40,000 troops to Afghanistan as he searches for waysto convince North Korea to give up its nuclear weapons andprevent Iran from obtaining them. All those policies will playout in the context of the 2010 mid-term congressional elections.
Election Time Line
“The time line to 2010 starts soon,” said Julian Zelizer,a professor of history at Princeton University. “He’s only gota few months of flexibility left.” After that, lawmakers willfocus on their own, not the president’s, priorities, he added.
The stock market has experienced both a bear and bullmarket during Obama’s first nine months in office. The Standard& Poor’s 500 index plunged 20 percent during the first sevenweeks of his presidency and has surged 61 percent since, itssteepest rally since the 1930’s.
Behind the turn-around: a perception among investors thatthe U.S. had avoided another Great Depression, thanks in part toObama’s $787 billion economic-stimulus program and his actionsto shore up the country’s 19 biggest banks.
“Obama quickly got his arms around the very difficulteconomic challenges he inherited,” said Mohamed El-Erian, chiefexecutive officer of Newport Beach, California-based PacificInvestment Management Co., which runs the world’s largest bondfund. “The markets are focused on what did not happen, namely,that the U.S. and global economy avoided a major meltdown.”
Troubled Americans
That might not be enough for voters to support Democrats,Zelizer said. Americans are more troubled by a continued rise inunemployment that Mark Zandi, chief economist at Moody’sEconomy.com in West Chester, Pennsylvania, forecasts won’t peakuntil the middle of next year at around 10.5 percent.
That’s certainly the case in Clark County, where theunemployment rate was 9.9 percent in September. “They just wantto know where are the jobs, when are the jobs going to come,”Young said.
From July 20-Oct. 19 Obama averaged a 53 percent jobapproval rating, compared with the two previous quarters whichwere both above 60 percent, according to Gallup Daily trackingpoll. The nine-point drop from the second quarter is thesteepest for an elected U.S. president in his first term.
Obama’s advisers defend the president’s policies, sayingthat the stimulus package has sparked an economic recovery andsaved or created 1.5 million jobs, with more to come. They’vealso left open the possibility of further steps to combatjoblessness.
Creating Jobs
“The goal of anything we do is to create private sectorjobs,” senior adviser David Axelrod, said in an interview lastweek.
The president’s room to maneuver is limited by the budgetdeficit, which former congressional budget analyst StanCollender forecast would still be over $1 trillion in thecurrent fiscal year that began on Oct. 1. “He’s running out ofresources,” Zandi said.
Federal Reserve Chairman Ben S. Bernanke, speaking at a SanFrancisco Fed conference Oct. 19, urged the administration toset out a strategy to “substantially reduce federal deficitsover time” to maintain confidence in the U.S. dollar.
The dollar has dropped 13 percent against an index of majorcurrencies since Obama took office on Jan. 20.
Beyond domestic policy, international matters also areshaping his first year in office.
Hurdles Abroad
While Obama’s Nobel Peace Prize, awarded Oct. 9, istestament to America’s burnished image, what has remained out ofObama’s reach is visible progress persuading North Korea toreturn to talks, convincing Israeli, Palestinian and Arableaders to compromise on steps to peace and achieving abreakthrough on relations with Iran.
Afghanistan has emerged as the toughest national securitychallenge.
On Capitol Hill, Republicans are pressuring Obama to commitfast to a substantial surge of troops, while Democrats arequestioning an expanded or prolonged U.S. involvement. There isno resolution yet to an August election marred by fraud, and theinsurgency in neighboring Pakistan has worsened.
“How the mission in Afghanistan fares will to asignificant degree determine the legacy of the Obamapresidency,” said Charles Kupchan, an adjunct senior fellow atthe Council on Foreign Relations.
Major Challenges
Zelizer likened Obama’s challenges to those Lyndon BainesJohnson confronted after he assumed the presidency followingJohn F. Kennedy’s assassination in 1963. Johnson pushed throughlegislation in 1964 outlawing racial segregation and launchedthe war on poverty. He also expanded the U.S. military role inVietnam, the start of what proved to be an unpopular build-upthat convinced him not to seek re-election in 1968.
Americans are split on Obama’s record. Forty-nine percentof voters say he has accomplished a great deal or a good amount,while 50 percent say not much at all, according to an Oct. 15-18ABC News/Washington Post poll.
“I’m happy with where we’re at,” Axelrod said. “Andfrankly given the fact that we’re governing the worst economy ofour lifetime, it’s a remarkable thing that his support has heldup as well as it has.”
To contact the reporters on this story:Rich Miller in Washington rmiller28@bloomberg.netJulianna Goldman in Washington at jgoldman6@bloomberg.net
Last Updated: October 23, 2009 00:01 EDTSource: Bloomberg
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