2 | Sparking Recovery
Evaluation of the Recovery Act tends to be big-picture and binary. Has the stimulus put us on the path to recovery — yes or no? But the stimulus was far more than macroeconomic medicine. As conceived by the White House, the Recovery Act was not only intended to address the economic catastrophe at hand, it was simultaneously designed to make investments critical to reviving the middle class and improving America's long-term competitiveness.
"This wasn't a stimulus bill," says Van Jones, a senior fellow at the Center for American Progress who served as Obama's green-jobs czar. "A stimulus is what you do when you think you've got a short, V-shaped problem in the economy and you want to deliver a jolt to reset to business as usual. A recovery program is what you need when business as usual is no longer possible."
To the extent that Obama has attempted to brand his presidential project in the way that FDR did with the New Deal or LBJ did with his Great Society, he has talked about a "New Foundation." And the Recovery Act was designed to lay the cornerstones. The law included the most progressive middle-class tax cut ever enacted — delivering benefits to 95 percent of working families. It invested $94 billion in clean energy and $100 billion in education — unprecedented levels of commitment in both areas. It also devoted $128 billion to health care and $70 billion to mending America's safety net — including direct cash payments to the elderly, the disabled and impoverished parents, as well as billions invested in low-income housing, food stamps and child care.
"If you passed each of those as separate pieces of legislation," says Ornstein, of the American Enterprise Institute, "that in and of itself would make for a very significant record of accomplishment." Seen through this prism, the stimulus alone represents a strikingly progressive presidential legacy — rivaling the biggest reforms of the Clinton presidency. And it passed on Obama's 24th day in office.
3 | Saving Detroit
The lefty caricature of Obama as a timorous corporate lackey unwilling to take bold action on behalf of average Americans bears little relation to the president who made a $60 billion bet on the future of the U.S. auto industry — and hit the jackpot.
From the start, the prospect of recycling TARP funds to save GM and Chrysler from liquidation was wildly unpopular — a fact that Obama's top political counselors, warning against the intervention, vigorously impressed upon him at the time. But if action was politically risky, inaction was economically intolerable: Had the administration allowed GM and Chrysler to go under, it would have triggered a collapse of parts suppliers and dealerships nationwide, creating such collateral damage that even Ford would likely have gone belly up. The collapse would also have led to the loss of more than 1 million jobs, primarily in the devastated economies of Michigan, Ohio and Indiana, where unemployment is among the highest in the country.
After pushing his team to lay out a plan that would not simply bail out the auto industry with condition-free cash, as Bush had done, but to use the government's leverage over automakers to set them on a more competitive course, Obama literally went for broke. Despite cries of "socialism" and "Government Motors," the administration bought a 61 percent stake in GM, ousted its chief executive, forced both bondholders and UAW members to make concessions and steered the company through bankruptcy in record time. Simultaneously, the administration invested $8 billion in Chrysler — a dowry, of sorts, to secure the company's shotgun marriage to Italian automaker Fiat.
It's difficult to overstate how effective and efficient the government's intervention has been. By risking $60 billion, Obama saved a third as many jobs as the entire stimulus package, which cost 13 times more. In fact, the auto industry has not only survived, it has roared back to life. GM is profitable and preparing to go public in an IPO that could allow the government to recoup its investment. Ford is prospering, edging out Japanese rivals for quality. Even Chrysler is expanding its market share. "The bailout of the auto industry protected against absolute devastation in the economies of the Midwest," says Ornstein. "And it is now turning out to be a huge financial boon for taxpayers."
4 | Reforming Health Care
Obama's crowning legislative achievement is health care reform. And true to Joe Biden's pithy and profane assessment, it's a Big Fucking Deal. "All progressives since Theodore Roosevelt wanted it, all Democrats since Harry Truman fought for it, and only Barack Obama got it," says Brinkley. "This is his huge accomplishment."
Obama's $1 trillion reform is neither simple nor elegant. But over the next decade, it will extend health coverage to 32 million uninsured Americans — the equivalent of New York and Illinois combined — by expanding eligibility for Medicaid and subsidizing insurance for low- and middle-income citizens. By the end of this decade, 95 percent of Americans will have health insurance.
The law also establishes a new bill of rights for patients: Starting in 2014, insurance giants will be banned from denying coverage based on pre-existing conditions and from imposing annual caps on benefit payouts. Other rights have already kicked in. As of September, insurance companies can no longer arbitrarily revoke coverage for those who get sick. Children with existing illnesses can no longer be denied insurance. Younger Americans can stay on their parents' policies until they're 26. And 1 million elderly citizens are receiving checks for $250 to fill the gap in Medicare's coverage of prescription drugs. Most striking of all, the law accomplishes all this while extending the solvency of Medicare by a dozen years and cutting the deficit by $143 billion over the next decade.
Historians give Obama high marks for finding a way to push through health care reform even after the surprise election of Republican Scott Brown to Ted Kennedy's former Senate seat in Massachusetts. "One of the most extraordinary moments of this presidency was the decision to go for broke on health care after Scott Brown," says Goodwin. "Instead of deciding to pull back — we'll get half a loaf or whatever — Obama was willing to take a risk at that point. They could have lost that whole thing, and it would have been devastating for his presidency. Somehow, even though we saw the ugly process, it did work in the end."
With his victory on health care, Obama defeated the anti-government Republicans who sought to destroy him politically and created a program that will benefit Americans for decades to come. But the victory cost him dearly among some progressives — most prominently Jane Hamsher, the activist ringleader of Firedoglake — who continue to spit on the law for its lack of a government-administered alternative to private insurance. "Liberals and conservatives hate the health care bill for the same reason," Hamsher tweeted. "It sucks."
The administration remains unapologetic. "We couldn't have gotten there with the public option," says Axelrod. "The choice was between letting the thing fail or taking a huge leap forward for everyone who will benefit from this now and for generations to come. It wasn't a hard choice to make."
To read the new issue of Rolling Stone online, plus the entire RS archive: Click Here
POLITICS No Price Big Banks Can't Fix
Picks From Around the Web
blog comments powered by Disqus