Nice speech, Mr. President. You still can't do much to help the economy

Walter Shapiro
Yahoo News
FACT CHECK: Obama spins health insurance rebates
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In this Thursday, July 18, 2013, photo, President Barack Obama stands with families who benefited from the health care law provision that provides consumers with a refund if their insurance company doesn’t spend the majority of premium dollars on medical care, as he speaks about health care reform and the Affordable Care Act in the East Room at the White House in Washington. In his speech, Obama said rebates averaging $100 are coming from insurance companies to 8.5 million Americans. In fact, most of the money is going straight to employers who provide health insurance, not to their workers, who benefit indirectly. (AP Photo/Charles Dharapak, File)

Barack Obama flew to Knox College in his political home state of Illinois to deliver a ballyhooed economic speech Wednesday afternoon on the plight of the hard-knocks middle class.

After 10 fingers worth of presidential pivots on the economy, Obama promised that this was the final pivot, the one that would define his second term. The president boldly announced that he intends “to use every minute of the 1,276 days remaining in my term to make this country work for working Americans again.”

There is only one problem – the next 1,276 days are apt to be a portrait in presidential frustration because of something called the Republican House. Sure, Obama confidently proclaimed, “Some [ideas] will require Congress and some I will pursue on my own.” But (shocking revelation ahead) anything major in government requires money – and that requires the approval of House Speaker John Boehner and company.

As a result, the Obama speech fit the pattern of so much contemporary political rhetoric: strong on the diagnosis of the problem, but unrealistically wispy about what to do about it. Obama correctly noted, “Opportunities for upward mobility in America have gotten hard to find over the past 30 years.” But, sadly, the American Dream is likely to be as frayed and tattered in 2017 when Obama leaves office as it is today.

In an important sense, Obama’s laserlike focus on the sputtering job market comes three years too late. In early 2010, Obama confronted the question that ultimately every president has to answer: What will be my legacy?

Obama chose health care reform, and it has made all the difference. To govern is to choose – and by choosing health care, Obama inadvertently lost his chance to put a lasting imprint on the economy. High unemployment, and the personal anguish that comes with it, will be as much a legacy of his two terms in office as Obamacare.

Even though the 2010 unemployment rate never dipped below 9.3 percent, the president turned his attention away from stimulating the recessionary economy. Instead, his dream was to accomplish what had eluded every Democratic president since Harry Truman: provide health care coverage for the uninsured.

Make no mistake, Obama understood the stakes embedded in that decision. In late January 2010, a week after the Democrats lost the Massachusetts special election to fill the late Ted Kennedy’s Senate seat, the president defiantly expressed his determination in the State of the Union address, “By now it should be fairly obvious that I didn’t take on health care because it was good politics.”

In fact, it was terrible politics for the Democrats, as the off-year elections soon made clear.

The 2010 results were Obama’s Waterloo, a defeat of Napoleonic proportions. The Democrats not only lost 63 House seats and six Senate seats, but also lost control of congressional redistricting in key states like Pennsylvania, Ohio, Michigan and North Carolina. The result of this partisan gerrymandering is that few in politics, other than the Democratic spin team, believe that the House is winnable for Democrats in 2014 or, in all probability, at any time this decade.

What role did health care reform play in the catastrophic 2010 Democratic defeat?

A post-election study by political scientists Seth Masket and Stephen Crane found that health care reform was the most damaging vote for House Democrats, costing them about 7 percent support and 13 seats.

That may understate the consequences of the president’s insistence on passing health care reform while the economy was staggering. According to 2010 exit polls, 63 percent of voters said that the economy was the most pressing issue facing the nation. But, as Democratic pollsters worried at the time, Obama was perceived as caring more about his pet issue (health care) than the top concern of the voters (jobs).

The results from that one election have been fatal to Obama’s domestic agenda. Because of the 2010 GOP landslide, the only major stimulus that both parties have ever agreed to since then was the temporary cut in the payroll taxes that expired last December. Obama can propose all the idealistic programs on the Democratic drawing board, make all the speeches he wants, pivot towards the economy as often as he chooses – and nothing major will happen.

If the crisis as Obama and his speechwriters believe is the hollowing out of the middle class, then there is little, in reality, that the president can do to bring back the prosperity that was the birthright of most Americans. In fact, the only economic decision that probably will matter in Obama’s second term is his choice of who will replace Federal Reserve Chairman Ben Bernanke. For since 2010, the Fed has become the only engine of government effectively promoting economic growth.

Every presidency has a moment when it becomes a pretend administration. All the levers of the White House continue to operate – policy-planning sessions are held, programs are developed, speeches are written, roll-outs are planned, and Air Force One is deployed. It looks like life at the pinnacle of power. Except that it is all for show since none of these programs will ever make it through Congress.

So it is with Obama and the economy in 2013.

Maybe things would be different if the Republicans, especially in the House, were wiling to make deals instead of taking their inspiration from the 1962 James Bond movie, “Dr. No.” But while GOP obstinacy contributes to Congress’s record low approval rating, House Republicans are almost certain to have veto power over Obama’s agenda all through the rest of his presidency.

Back in 2010 – the year that shapes the Obama legacy – the president often sounded a triumphant note. A week after Congress passed health care reform that April, a buoyant president told a rally in Maine, “We don’t fear the future. We shape the future.”

Well, not exactly.

For that was the moment when Obama lost any further chance to shape the future of the economy. If Obamacare proves a success – and millions of Americans no longer have to worry about getting and paying for health insurance – then maybe that choice was worth it. But try telling that to all those mired in the economic doldrums with no relief in sight, from Obama or anyone else.




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