THE MONEY AND THE MEGAPHONE - February 17, 2009

President Obama's $787 billion economic stimulus package passed

its final congressional hurdle last Friday, and heads for a signing ceremony at the White House. It is a crucial early victory for a new president and the most momentous piece of budgetary legislation

since the Reagan tax cuts of 1981. It may likewise mark the start of a new political era in Washington. Yet in spite of – or perhaps because of – the enormous consequences of this early victory, the response of the US mass media has been subdued to say the least.

The news on the day of final passage was overshadowed by an airliner crash, yet the media tone was remarkable throughout the week. After a key Senate test vote last Monday – a hurdle cleared with only one vote to spare – CNN moved on within minutes to a Los Angeles woman who had octuplets, while rival MSNBC's pundit panel discussed some minor Obama missteps in previous days. Throughout the week the focus was on stumbles and setbacks, especially his inability to win Republican support, aptly symbolized on Thursday when Senator Judd Gregg (R-New Hampshire) withdrew from consideration for a cabinet post.

Of course Obama has made mistakes and suffered setbacks. He boasted of saving jobs at one firm only to have the CEO acknowledge that more layoffs were scheduled. His inability to garner more than the absolute minimum of Republican support is surely his own greatest disappointment. To a good many Democrats, his effort to court Republicans has been his greatest mistake – forgetting that he needed a handful in the Senate, with its supermajority rules, and in the event got just barely enough.

Like Waterloo the stimulus bill has been a close run thing, but in the end Obama got almost exactly what he asked for, and got it quickly. Speed was of the essence, both substantively, to deliver a cardiac jolt to the economy, and politically. Congress, and Washington generally, is a machine built for paralysis. Even for the majority Democrats this bill had something for everyone to dislike, and most of them did. To liberals it was timid, filled with needless concessions from the outset; to more conservative Democrats (let alone Republicans) it was too bold and risky. The Washington noise machine, which thrives on disgruntlement, automatically set to work amplifying the objections from all quarters.

Thus even in the course of a few weeks – and Obama has been president for less than a month – the initial broad coalition in support of the measure was beginning to fragment. Public support, while remaining strong, was also softening. Much of the public was and is torn between a sense of urgency on the one hand, and on the other hand their not-unfounded doubts that Washington can do anything right. Under bombardment from the media noise machine, echoing every complaint, the latter impulse was gradually gaining strength, undermining support for the measure.

The only way to defeat this grinding-down process is to outrun it, and that is what the president has done. He did it in part with the leverage of his own personal popularity, and in part by following the familiar KISS principle: Keep it simple, Stupid! Instead of doing what many Democrats recommended and making a high opening bid, to be bargained down in Congress, he came in with a package already calculated to gain the necessary minimum of support (though naturally he hoped for more). Negotiations were thus simplified, avoiding the risk of a stall followed by collapse.

Last Monday's Senate vote made it clear that Obama was winning his gamble – by a narrower margin than he sought, but a sufficient one – and so was about to cap his first month in office with a key legislative victory, one moreover with enormous long term implications. Why then the downbeat tone of mass media coverage?

Blogger-journalist Josh Marshall of Talking Points Memo sees this as 'a product of how Washington continues to be wired for Republican control.' For members of a nearly powerless opposition, Republicans remain surprisingly prominent on political talk shows, including the relatively serious and prestigious Sunday morning panel shows. Media organizations run and tout poll questions all but calculated to further GOP talking points. One poll asked if the stimulus bill contained 'too much spending.' Setting aside the fact that stimulus means spending, this is a question that US poll respondents answer almost reflexively in the affirmative, like asking them whether Hollywood movies have too much sex.

Yet the liberal blogosphere has also greeted Obama's victory with something of a yawn, Marshall announcing it with a perfunctory one-line post. Like their rivals in the mass media, they are part of the Washington culture of disgruntlement, and perhaps the sheer speed of this thing has caught them both by surprise. The rosy haze of the inauguration of the first black President had bare faded, with Washington was just starting to return to its familiar patterns, and suddenly the battle royal is already over, the stimulus package a done deal.

The bill itself has the expected flaws of something put together in urgent haste. Critics can justly argue that much of it enacts a familiar Democratic wish list of programs, by no means the ideal mix for creating jobs rapidly, though according to the respected nonpartisan Congressional Budget Office it is in fact a fairly good one. Undoubtedly it contains a great deal of pork, defined as programs you or I don't like.

But in purely practical political terms, what was pork yesterday has just turned into bacon. If the natural tendency of the US political process, before a spending bill is passed, is to subject it to the death of a thousand cuts, once it passes everyone who possibly can snuffles up to the trough to make sure they get a share. Hours after final passage, some Republicans were already touting the benefits to their districts from a measure they had voted against.

President Obama is now in the driver's seat. He has the White House megaphone, and now the money too. The bill passed by Congress is only a broad framework. About a third of the total is in the form of tax breaks or aid to the states, but about $500 billion in federal spending will be under the administration's effective control. The White House will make most of the actual detailed spending decisions, with congressional scrutiny only after the fact, and every interest in Washington reduced more or less to supplicants. This, more than the doctrine of a 'unitary executive' touted by the last administration, is the substance and sinew of real presidential power.

The one real setback Obama has received is to his hopes for broad bipartisan consensus. These hopes seem to have been genuine, and they now seem largely dead. Most Republicans have chosen to define themselves as the Party of No, and this is rather understandable.

The truth is that 'bipartisanship,' though a perennial favorite among Washington pundits, has been overtaken by events. The recession, perhaps incipient depression, has drawn the sharpest possible line between the basic principles of the two US political parties. Obama's neo-Keynesian response to the crisis, though reluctantly endorsed even by relatively conservative economists, is a fundamental repudiation of Reaganomics. If Obama's program is seen by the public as successful it will end an era of conservative ascendancy and set the stage for a long term revival of government activism. And on a philosophical level, if Obama's prescription is right the Republicans are wrong, and have been all along.

Bipartisanship is also more popular among pundits than with the US public. What the public most dislikes about Washington is not partisanship as such, but 'partisan bickering' that ends in inaction. This is just what Obama has avoided. The partisan bickering was brief, and ended with decisive action.

Whether all of this is successful in the long run will of course be determined by the outcome. If the economy goes over the cliff anyway, Obama and the Democrats will be discredited in turn – and the situation for the US and the world will be very dire. But for now, President Obama has made himself the master of Washington … even if Washington has not quite come to grips with it yet.

Rick Robinson

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Author of the article holds B.A. degree in Economics from the University of California in Los Angeles (UCLA) and M.A. degree in English from California Polytechnic State University in San Luis Obispo, California . Mr. Robinson worked as a county-level campaigner in Dukakis (1988) and Clinton (1992) presidential campaigns. He presently works as a journalist and political commentator.

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