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Midterm Blues

President Obama took a beating in November's elections. Can a wounded President and a divided Washington make any progress on the enormous challenges the U.S. faces at home and abroad?

By David E. Sanger in Washington, D.C.

Two years ago, when Barack Obama stood on the steps of the Capitol and was sworn in as the 44th President of the United States, the words "hope and change"—the clarion call of his improbable campaign for the presidency—resounded across the nation.

But 24 months is a long time in American politics, especially in an era of high unemployment, soaring national debt, and a broad sense of disillusionment among voters. So last month, still reeling from November's midterm elections in which Obama took what he himself called a "shellacking," the President sounded very different. Talk of hope was replaced with weary acknowledgment of "new realities." And talk of change was out; suddenly, the word "compromise'' was in.

In fact, two years into his presidency, Obama faces exactly the kind of dilemma that confronted many of his predecessors, from Thomas Jefferson to Bill Clinton.

Any President who suddenly loses a large number of seats in Congress must decide between sticking to his guns and compromising to get something done. Facing sharp divisions and a country stung by the ongoing recession, Obama has clearly signaled he's choosing to compromise in an effort to break the gridlock in Washington that has infuriated so many voters.

'We're Going to Compromise'

Consider what he said in early December, just a few hours after he had given in to Republican demands to retain deep tax cuts enacted by President George W. Bush a decade ago. As a candidate, Obama had railed against those tax cuts, saying they gave too much to the wealthiest Americans. As President, he cut a deal, extending the cuts—at a cost of nearly a trillion dollars—in return for extended unemployment benefits and additional tax relief for middle-class workers that could help stimulate the economy.

"This is a big, diverse country,'' Obama said, clearly annoyed with charges that he'd given up on his principles. "In order to get stuff done, we're going to compromise."

He argued that Franklin D. Roosevelt settled for less than he wanted in 1935 when he created the Social Security program, which guarantees a minimal level of income for retirees—but the program improved drastically over the decades. Obama said he did the same thing last year when he agreed to a health care law that didn't include everything he wanted.

"This country was founded on compromise,'' he said. As a black American, Obama added, "I couldn't go through the front door at this country's founding. And if we were really thinking about ideal positions, we wouldn't have a Union." He seemed to be referring to the many compromises that kept the country together before and after the Civil War.

Jefferson, Lincoln & Truman

The President was trying to remind the country that he is not the first occupant of the White House to suffer a huge loss of support halfway through his term. Jefferson was under attack throughout his presidency and had to compromise on critical decisions about how the country would manage its economy. Lincoln tried compromise of every kind to hold the Union together; the effort failed and the result was the Civil War.

Some of Obama's political advisers argue that his willingness to compromise with Republicans is part of a broader political strategy, one that the Washington Post called an effort to portray himself "as the last reasonable man in a sharply partisan Washington.''

Could it work? History suggests that just because a President loses control of Congress doesn't mean he can't get anything done or that he's doomed to defeat in his bid for re-election.

"Obama might look to Harry Truman for guidance on how much to collaborate with the leaders of the new Republican House," says presidential historian Michael Beschloss. "Truman lost both houses of Congress in 1946, and fashioned a dual strategy. On foreign policy, he worked closely with Republicans to enact policies that constituted America's first steps in the Cold War: the Marshall Plan, NATO, the Truman Doctrine." (The Truman Doctrine set forth America's intention to support democracies and oppose the spread of Communism around the world.)

On domestic policy, Beschloss notes, "he did the opposite and thus in 1948 could denounce the Republicans of the 'do-nothing 80th Congress' for failing to carry out their campaign promises. The result: [Truman] got re-elected and won back both houses for the Democrats."

Bill Clinton may be another guide for Obama. He won the presidency in 1992, defeating George H.W. Bush after the country dipped into a recession that, compared to the last few years, seems relatively mild. In 1994, though, Clinton lost control of Congress, and many predicted his presidency was over.

Foreign Threats

They were wrong. Clinton outflanked his opponents by tempting them to overreach. Republicans shut down the federal government by refusing to pass spending bills—a move that angered the public and backfired. Clinton easily won re-election in 1996.

But, as the historian Ernest May said, history often rhymes with the past, but rarely repeats it. The problems confronting the U.S. today are very different from those that faced Truman or Clinton. And so is the national mood.

Facing tough opposition in Congress, President Obama may turn his attention to the arena where he doesn't need Congress to act: foreign policy. And he has plenty of foreign-policy challenges to deal with.

The war in Afghanistan is being fought at a feverish pitch, and Obama knows he must make progress before beginning the long-promised slow withdrawal of troops this summer. Iran's nuclear program has not been deterred by economic sanctions, and the President will have to decide whether to continue to try to slow Iran's progress or threaten military action. North Korea, now believed to have nuclear capabilities, attacked South Korea—a close U.S. ally—twice in 2010. Any of those issues could suddenly dominate the nation's agenda.

Climate Change & China

Then there is the unfinished domestic agenda. By focusing on passing health care reform in 2010, the President postponed legislation on energy and global warming. Now it's unclear that he can get a deal on either, since Republicans have been opposed to taxing carbon emissions—the key strategy for many environmentalists.

Obama has spoken frequently of investing in infrastructure—things like roads and telecommunications grids—and education so the U.S. is better equipped to compete with China, India, and other rising powers. But it's unclear that Congress will fund the building of bullet trains—as the Chinese have—or put more money into education. The test of Obama's negotiating skills will be whether he can work with Republicans on any of these subjects, or just abandons his agenda.

Over everything looms the issue of the national debt. After a decade of overspending—on tax cuts, two wars, a range of entitlement programs, and huge programs to spur the economy—the national debt is now $13 trillion and climbing.

In fact, just a week before Obama made the tax-cut deal, a bipartisan commission on the debt reported that the current level is unsustainable, and that the U.S. would have to cut social programs and defense spending drastically, raise the retirement age, rethink how much money it spends on popular programs like Medicare—and raise taxes.

Politicians from both parties denounced the commission's report, and went on to cut their tax-cut deal. But neither side can ignore the debt problem forever.

Tea Party

These problems have put voters in a sour mood. The Tea Party rode to prominence denouncing "big government," always a popular theme on the campaign trail. Now a number of prominent Tea Party members are in Congress, and they—along with other lawmakers of both parties—are going to have to become specific about what, exactly, they would cut.

The defense budget? (Republicans have usually argued for more defense spending, not less.) Social Security and Medicare? (The elderly always come out to vote, so that's dangerous territory for any politician.) Investments in schools, at a time when American students are falling behind Chinese and South Korean students in tests?

Moreover, lawmakers would have to make these decisions at a time of intense media scrutiny. Every small debate about how to make the economy grow or what programs need to be cut gets amplified on cable TV and online. Little arguments sound like big ones, and the bigger issues get lost. Some blame Obama.

"On some deep level, Obama must understand that, at this moment at least, his presidency is coming apart," writes political strategist Peter Wehner. "It's not at all clear to me that he's particularly well equipped to deal with the shifting fortunes, the hardships, and the battering that a President must endure.''

But President Obama says he has been underestimated before and that over the long term, focusing on step-by-step change will work, as long as Americans understand the direction in which he's heading.

"I'm keeping my eye on the long term and the long fight—not my day-to-day news cycle, but where am I going over the long term,'' he told reporters recently.

Maybe so, but he knows that Presidents who cannot get the economy growing briskly again sometimes don't have a long term—and in particular, a second term.

(The New York Times Upfront, Vol. 143, January 10, 2011)