Obama, You've Got Leverage

Supporters of Barack Obama have plenty of reasons to be disappointed these days, from his surveillance fetish to his slow-bleed responses to the scandal of the moment. But no tic has frustrated liberals more over the last four and a half years than the president’s unease with a certain guerrilla style of politicking. We’ve seen it time and again—with the stimulus and health care bills in 2009, the expiring Bush tax cuts in 2010, the debt-ceiling and deficit negotiations in 2011, and the fiscal cliff in late 2012. The administration has been too solicitous of delicate congressional sensibilities, too reluctant to initiate confrontation, too skittish to see through any high-stakes game of brinkmanship.

And then there was the sequester, which may have been the tactical low point. For several weeks prior to the March 1 arrival of the automatic spending cuts, the administration spared no effort in making vivid the damage they would wreak on kids, seniors, military personnel, really our entire way of life. The White House dwelled on the coming cuts to the Federal Aviation Administration (FAA), which would result in travel delays not seen since our forefathers left Egypt.

It was a shrewd move—what better way to pressure the GOP to rethink the sequester than to threaten frictionless air travel, a convenience Americans claim as a kind of birthright? That the gambit didn’t work is largely the fault of weak-kneed senators,¹ but two chronic White House failings actually helped doom it: First, in the weeks before the FAA furloughs, the administration neglected to brief Senate Democrats on strategy. Then, it prematurely conceded defeat when the senators went nuts. “If [the White House] had said, ‘This is the moment, here’s the plan,’ we probably could have convinced the caucus to hold the line,” says a Senate leadership aide. In fact, Majority Leader Harry Reid was sufficiently confident that he introduced a bill to eliminate part of the sequester on day two of the great traffic jam in the sky. But the White House folded the following day, when Press Secretary Jay Carney said Obama “would be open to” a congressional reprieve for the FAA, blindsiding Reid.² The president signed the measure the following week, giving up his main bargaining chip for renegotiating the whole terrible policy.

There was a time when such reversals weren’t necessarily disastrous for the administration. During the first two years of the Obama era, Democrats could compensate for a certain amount of strategic wussiness through their control of both houses of Congress. But with the Republican grip on the House looking like a second-term mainstay, and a crush of scandals demanding White House attention, Obama doesn’t have the luxury of do-overs.

Fortunately, the Oval Office arms its occupants with a variety of tools for besting political opponents, even if one of them isn’t the Tolkien-esque magic ring you would imagine from the Sunday morning chatter. Obama has plenty of opportunities to salvage his second term and build on his legacy. He just has to commit to playing the hard-ass.

Even the sequester fight can still be won. When the president waved the white flag in April, he did so for this year. But the sequester is a ten-year proposition, and every new fiscal year brings an opportunity to rewrite spending bills so as to lessen its impact or eliminate it entirely. Both parties are now busy doing this. In the Democratic-controlled Senate, the bill-writers are proceeding as though the sequester doesn’t exist, granting the various federal agencies what they deem to be their fair and just allocation of resources.

That’s not surprising given that Senate Democrats consider the sequester to be nonsensical. More interesting is that House Republicans are also writing bills that violate the sequester’s caps on spending. Except that, instead of junking the sequester altogether, the Republican approach is to ignore it for the Defense Department and make up the difference through even deeper cuts to domestic spending.³

For Democrats, this is an encouraging development. Administration officials will be able to bludgeon House Republicans for slashing Head Start, medical research, and special education. Meanwhile, Republicans will not be able to say they plan to slim down domestic spending overall, then deny they intend to cut any particular program, as they sometimes have in the past. They will have written all the numbers down on paper.

Perhaps more importantly, it’s also a significant tell. After all, there’s no reason Republicans would hand the White House such a large stockpile of P.R. ammunition unless they were increasingly concerned about what the sequester is doing to defense spending.⁴ That gives the White House another important source of leverage. Unlike the sequester skirmishing this past winter, when the GOP pretended to be blasé about defense, the White House can now say: You’ve admitted you can’t live with the cuts, and we hate the domestic cuts, so let’s find a way out of this.

Of course, this being the House Republicans, there’s no guarantee that they’ll act in a way that even mimics rationality. In which case, the White House may have to do something it has previously resisted: allow Republicans to shut down the government. That’s what will happen if the two sides can’t agree on funding for 2014 before the fiscal year expires on September 30.

Politically, it’s a no-brainer for Obama. In addition to being able to accuse Republicans of shuttering the government because he won’t slash education and medical research to antediluvian levels, as opposed to the Eisenhower-era levels of the sequester, the mere exercise of shutting down the government can be framed as an act of economic sabotage. “The president has a bully pulpit that’s about five billion times bigger than [Speaker of the House John] Boehner’s,” says Neera Tanden, a former administration official who runs the Center for American Progress. “A government shutdown should be about the economy—threatening the fragile growth we have by possibly shooting ourselves in the face again.”

Will Obama have the backbone to see this through? The track record is, admittedly, not encouraging. But the early indications suggest yes. White House Chief of Staff Denis McDonough and Deputy Chief of Staff Rob Nabors have already been in touch with key Senate staffers about the strategy behind a possible shutdown, as has Office of Management and Budget Director Sylvia Mathews Burwell.

Crucially, the consensus among senior White House aides about the utility of reaching a budget deal is different than it was the last time the White House faced a potential shutdown, in the winter and spring of 2011. “Back then, the political strategists wanted a deal. [Senior adviser David] Plouffe wanted a deal . . . to increase our numbers with independents,” says a former administration official. “There’s no constituency for caving now.”

Then there is Obama himself, who appears to be grappling with the realization that he now has fewer days in front of him as president than behind him—the Oval Office version of a midlife crisis. In March, the Republicans blocked his nominee to the all-important D.C. Circuit, which has almost exclusive jurisdiction over appeals of lawsuits involving federal regulations. Instead of simply nominating another candidate and letting the GOP wait her out, Obama nominated three (the total number of vacancies). The derailment of one candidate is a political and media nonevent—a simple expression of congressional prerogative. But derailing three at a time would be an impressively provocative act. Obama was, in effect, daring the GOP to start a fight—one he reckoned he would win.

And it’s not just judges. So far this year, Obama has put forth relatively progressive candidates for a variety of regulatory positions: labor secretary (Tom Perez), Environmental Protection Agency administrator (Gina McCarthy), and Consumer Financial Protection Bureau director (Richard Cordray). Rather than simply accept GOP obstruction as a fact of life, Obama and Reid have discussed a counterattack: the so-called “nuclear option,” in which Reid would press to change the Senate rule requiring 60 votes for administration nominees. (The rule change would itself require 51 votes.)⁵ The White House has, in turn, pledged to back the effort. “Reid and the president have spoken about it,” says an aide to Reid. “We’ve continued to move forward with the push. The obvious conclusion to draw is the right one.”

All of which is to say, there is no shortage of ways for the White House to win the fights it can’t avoid—the nominating and budgeting and administrating that sum to the daily functioning of government. But what about the fights the White House decides to initiate? The widespread assumption is that, once immigration reform is on the books, there will be no opportunity to pass legislation on a top liberal priority. As long as the Republicans control the House, it might be worth talking tax reform, which the GOP clearly covets, but taking, say, another crack at climate change is politically hopeless.

It’s not clear this is right. There may in fact be a path for something ambitious. It’s just that the strategy would have to be meticulous and the execution flawless.

Consider climate change, which the president clearly regards as a legacy issue—the latest evidence being his new climate initiative, whose centerpiece is an EPA rule restricting the amount of carbon dioxide that power plants can emit. If Obama wants to go even further and enact a carbon tax, how should he do it?⁶

The trick is to start from the endgame and work backward. There is almost no chance of anything useful happening in Congress between now and the end of 2014. Republicans will be trying to appeal to their conservative base in the run-up to the midterm elections, and signing onto a carbon tax is a lurch in the opposite direction. But what about 2015 or 2016? Contrary to the historical laws of lame duckness, the last two years of Obama’s term may be a reasonably favorable moment. In the same way that the GOP knows it must make peace with Latino voters prior to 2016, the 2012 election also made clear that the party has a large and persistent problem with young voters—the very people for whom climate change is a major concern. As a top former White House aide puts it, “There’s a generation of people who’ve grown up not asking whether global warming exists,” but simply taking it for granted.

The challenge then becomes how to acquire as much leverage as possible between now and 2015. Obviously one source will be sheer bodies in Congress, particularly the Senate, which in turn points to some sober-minded prioritizing. For example, any attempt to oust red-state Democrats who voted against background checks for gun owners makes it harder to one day round up votes for a carbon tax.

Then there is the matter of the default—which is to say, the world that will exist without legislation. The EPA’s forthcoming limits on carbon emissions would be roughly as distasteful to the GOP (and coal-state Democrats) as a carbon tax, possibly even more.⁷ Many observers believe the rule could be implemented by the end of Obama’s term, giving opponents an incentive to engage. “Things like rule-making can bring the GOP to the bargaining table,” says Erik Smith, a top Obama campaign consultant.

In a sense, the logic will be analogous to the fiscal cliff, when no Republican wanted to vote for higher taxes, but the party allowed an increase to pass anyway because the alternative was for taxes to rise automatically. Call it the carbon cliff—the GOP assents to a carbon tax to avoid stringent regulations that are otherwise inevitable.

Finally, working all the way back to the present, there is one step that has to happen immediately—like the second you read these words, preferably sooner. And it has less to do with climate change per se than immigration. The president and Democrats have been talking about immigration reform as though it were the realization of some lifelong legislative ambition, which the GOP may magnanimously, if grudgingly, accede to. This is completely misguided. Immigration reform is something Democrats would certainly like to achieve. But, politically, it’s not especially urgent. Hispanics will continue to vote Democratic in large numbers whether reform passes or fails. In fact, the percentage play is probably to root for failure, which Latino voters will blame on the GOP, further cementing Democrats’ demographic advantage.

By contrast, the GOP has to have immigration reform, and Republican elites know it. If, as is their wont, conservatives rise up and prevent John Boehner from bringing a reasonable immigration bill to the floor before 2014, the party will only become more desperate to pass immigration reform in 2015 or 2016, when the low-turnout, demographically favorable midterms will be over, and Republicans have nothing to contemplate but the prospect of another presidential wipeout at the hands of alienated Latinos. That means Democrats should make very few concessions on the immigration bill. (The so-called “border surge” compromise in the Senate was a disconcerting start.) Let Republicans vote it down if they choose, then come begging for a deal when they decide they’re ready. The Democrats must say, in effect, OK, we’ll do this one for you, but now you owe us—the price being a carbon tax.

Could all this work? No doubt, it would be considerably harder than using FAA cuts to overturn the sequester, or standing up to the GOP over a government shutdown, neither of which the White House has accomplished to date. Then again, when’s the next time Barack Obama will have a chance to change history? There are worse ways to channel a midlife crisis.

Noam Scheiber is a senior editor at The New Republic. Follow him @noamscheiber.

1. When they heard Transportation Secretary Ray LaHood explain what the FAA cuts would mean late the week before he began furloughing air traffic controllers, many senior Democrats called the White House and vowed an immediate legislative fix to keep the furloughs from happening.

2. According to the Senate leadership aide, “Everything fell apart when Carney said, ‘We’ll consider an offer.’”

3. Although the Republicans started down this road last year, their proposed domestic spending cuts were much smaller because the first year of the sequester required less savings overall. They soon lost their nerve anyway and struck a deal with Obama.

4. Well, there is one reason: Some Republicans are so ideologically hostile to domestic spending that they simply don’t care about the political consequences of slashing it. Likewise, some Republican congressmen in heavily conservative districts are far more concerned about a potential primary challenge from the right than fending off a Democrat in a general election. Still, it’s not clear why the GOP leadership would defer to these extremists at such enormous political cost—consider the downside of passing the Ryan budget in 2011 and 2012, then multiply it several times over—if it weren’t also increasingly anxious about the Pentagon cuts.

5. Technically, the rule-change could pass with only 50 votes—Vice President Joe Biden could break a 50-50 tie.

6. A congressionally-approved carbon tax is widely presumed to be superior to limiting carbon emissions through EPA rules because it is less vulnerable to legal challenges, and to being overturned by a future administration. At the broadest level, it is also like to have more popular legitimacy.

7. A lot of economists—and many Republican non-economists—believe a carbon tax is also more efficient than carbon regulations. The reason is that certain power plants in certain parts of the country could be economically viable even after paying the tax, whereas an EPA regulation might shut them down altogether. On the other hand, Dan Lashof of the Natural Resources Defense Council argues persuasively that an EPA rule allowing flexibility at the state-level could achieve roughly the same level of economic efficiency.