The New New Deal Read online

  The stimulus is also stocked with non-energy game-changers, like an initiative to sequence over 2,300 human genomes to help fight diseases like cancer and schizophrenia, when only thirty-four had been sequenced before. Or a $20 billion effort to computerize our pen-and-paper health system, which should reduce redundant tests, dangerous drug interactions, and fatal errors caused by doctors with chicken-scratch handwriting. Or the “Race to the Top” competition to promote data-driven reforms of public schools, which prompted dozens of states to revamp their education laws before they even submitted applications. Or the website recovery.gov, which lists every stimulus contract and lobbying contact, along with quarterly data detailing where all the money went.

  At a time when government wasn’t supposed to be able to run a one-car funeral, the Recovery Act was a real-time test of a new administration’s ability to spend tax dollars quickly, honestly, and effectively—and to reshape the country in the process.

  “America said it wanted change,” says Obama’s education secretary, Arne Duncan. “Well, this is it!”

  The Opening Act of the Obama Era

  The stimulus had its roots in Obama’s 2008 campaign agenda, which was mostly ignored while the media obsessed about his incendiary pastor, the ads comparing him to Paris Hilton, and other issues that had nothing to do with policy issues. It was put together during Obama’s chaotic presidential transition, while the press focused on who he would choose for his cabinet, which of his nominees hadn’t paid taxes, and what breed of dog he would give his daughters. It passed during his whirlwind first hundred days, when it competed for attention with his rescue plans for the auto, banking, and housing industries, his breaks with Bush on issues like torture, stem cells, and fuel efficiency, and controversies over everything from his handshake with Venezuelan strongman Hugo Chávez to the attempted sale of his Senate seat. Then its rollout was overshadowed by Obama’s epic battle over health care; his push to end the war in Iraq and expand the war in Afghanistan; the rise of the Tea Party, which held its first rally ten days after he signed the Recovery Act; the weak economy; the Republican revival; and the constant dramas over Somali pirates, Iranian nukes, Supreme Court nominations, financial regulations, beer summits, birth certificates, and killings of international terrorists that add up to an eventful presidency.

  Ultimately, one of the most sweeping pieces of legislation in modern history was reduced to an afterthought. In April 2011, Obama’s most influential supporter asked him on national TV whether he wished he had started his presidency by focusing on the economy instead of health care. “Oprah, I’ve got to tell you, we did start with the economy,” Obama replied with evident irritation.17 “Remember, the first thing we did was pass a Recovery Act.” Polls have found that most Americans see the stimulus as a giveaway to bankers, confusing it with the $700 billion financial bailout that passed before Obama was elected. I interviewed several congressmen who were under the same misimpression.

  This book aims to tell the story of the stimulus—how it happened, how it’s changing the country, how Republicans found their voice in opposing it, and how it’s been distorted by the Washington funhouse. There’s never been a bill this comprehensive hustled into law this fast, and its journey after passage has been equally unique.

  The stimulus is also the ultimate window into the Obama era, the opening act that foreshadows the rest of the show—the just-say-no extremism of the right, the unquenchable ingratitude of the left, the backroom deals with centrist senators, the gotcha games of the media, and the president’s real achievements, as well as the limits of those achievements, and his struggles to market those achievements. Most of all, the battle over the Recovery Act made it clear that Obama’s dreams of post-partisanship were doomed from the start. It was full of tax cuts and government spending that traditionally enjoyed bipartisan support, but it was greeted with virtually unanimous opposition by congressional Republicans who had secretly decided to fight Obama on just about everything.

  “If he was for it,” explains former Republican senator George Voinovich of Ohio, “we had to be against it.”

  The stimulus was also a case study in Obamaism. To left-wingers, it exposed the president as a spineless sellout, more interested in cutting deals than chasing dreams, willing and possibly eager to throw his base under the bus, desperate to compromise with Republicans who would never compromise with him. To right-wingers, it revealed Obama as a big-spending radical imposing European socialism on American free enterprise, somehow thuggish (in his I-got-the-votes partisanship and Chicago-style deal making) and wimpy (in his deference to House speaker Nancy Pelosi and other leftist congressional overlords) at the same time.

  In reality, the Recovery Act provided early evidence that Obama was pretty much what he said he was: a data-oriented, left-of-center technocrat who is above all a pragmatist, comfortable with compromise, solicitous of experts, disinclined to sacrifice the good in pursuit of the ideal. It reflected his belief in government as a driver of change, but also his desire for better rather than bigger government. And it was the first evidence that after campaigning as a change-the-system outsider he would govern as a work-the-system insider, that despite all his flowery talk he understood that bills that don’t pass Congress don’t produce change.

  Obama never sent a formal stimulus bill to Congress, and there’s a broad perception that he punted the Recovery Act to Capitol Hill, another recurring theme in his presidency. But that’s another Beltway myth. Congress helped shape it, but it was unmistakably an Obama bill. And it has been implemented in an Obama way.

  Inevitably, change in the Obama era will be judged in comparison to the candidate’s own rhetoric about renewing America’s promise and setting aside childish things, the New Age bombast that persuaded his grassroots army of Obamaniacs that they were the change they were waiting for. He did lay it on thick. The night he won the Iowa caucus with a mere 37.6 percent of the vote, he informed his supporters at the Des Moines Hy-Vee Hall that “years from now, you’ll look back and say that this was the moment—this was the place—where America remembered what it means to hope!” There was something begging-for-comeuppance about his pose as a politician above politics, denouncing the twenty-four-hour news cycle and the ten-second sound bite, crusading against Washington’s frivolity and negativity.18 Hadn’t this guy launched his career by challenging a state senator’s signatures and forcing her off the ballot? When exactly had America forgotten what it means to hope?

  But even that heady night in Des Moines, Obama never suggested that he could snap his fingers and create a more perfect union. “Hope is not blind optimism,” he told the ecstatic crowd. “It’s not ignoring the enormity of the task ahead or the roadblocks that stand in our path. …” He was peddling hope, but he had been a community organizer for too long to expect change without struggle. The stimulus was a product of that audacious faith that the way things are is not necessarily the way things have to be, combined with the duller insight that things wouldn’t change without sixty votes in the Senate. Reasonable people can disagree about the Recovery Act, and there ought to be great debates about its implications for government intervention in various sectors of the economy. But first, people ought to hear the real story of what was in it, how it got there, and how it’s been translated into action.

  This is a story about change, not just Obama. He’s not the guy who’s going to reinvent photosynthesis, and as he often tells crowds, change isn’t just about him.

  But it begins with him. It’s his vision.

  — ONE —

  A Man With a Plan

  The Obama inauguration was an unforgettable spectacle, as an African American took the oath to protect and defend a nation scarred by slavery and Jim Crow. The oath itself got so muddled that Chief Justice John Roberts visited the White House the next day for a second take, to make sure the forty-fourth president’s legitimacy wouldn’t be questioned. (It turned out that he didn’t have that power.) The weather was so frigid tha
t Yo-Yo Ma and Yitzhak Perlman resorted to the stringed equivalent of lip-synching. But the record crowds around the Mall and around the world didn’t seem to mind. When Obama was born, the marriage of his white mother, a teenager from Kansas, and his black father, a Kenyan who herded goats as a boy, would have been illegal in some of the states he’d just won. It was hard to imagine a more vivid advertisement for the American dream.

  Obama’s speech was memorable, too, especially the buzzkill it applied to the occasion.19 The media wanted to focus on race, a feel-good story that made a political event feel apolitical. Obama told a feel-bad story about national drift and economic collapse, a crisis that seemed more relevant to his first day on the job. He spoke of foreclosed homes, shuttered businesses, “a sapping of confidence across our land, a nagging fear that America’s decline is inevitable.” Who would want that on a commemorative plate? He concluded with a bleak image of George Washington amid the bloodstained snows of Valley Forge: “Let us brave once more the icy currents, and endure what storms may come.” What a bummer.

  In retrospect, though, the most important passage was not so memorable. Unlike FDR, whose nothing-to-fear-but-fear-itself inaugural was devoid of specifics, Obama outlined his immediate plans for change:

  The state of our economy calls for action: bold and swift. And we will act not only to create new jobs, but to lay a new foundation for growth. We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together. We will restore science to its rightful place and wield technology’s wonders to raise health care’s quality and lower its costs. We will harness the sun and the winds and the soil to fuel our cars and run our factories. And we will transform our schools and colleges and universities to meet the demands of a new age. All this we can do. All this we will do.

  All this went unnoticed, except the swipe at Bush about restoring science.

  I was live-blogging at Time.com, and my insta-response was: “This is the weak part of the speech. It’s a lovely laundry list, but it’s still a laundry list. Save it for the State of the Union.” In fact, the State of the Union would have been too late. The Recovery Act checked off every item on the list: roads and bridges (Title XII), transmission lines (Secs. 301, 401, 1705) and broadband lines (Titles I, II), scientific research (Titles II, III, IV, VIII), electronic medical records (Title XIII), solar and wind power (over a dozen provisions), biofuel refineries (Title IV), electric cars (Sec. 1141), green manufacturing (Sec. 1302), and education reform (Sec. 14005).20 They were all campaign priorities, and his transition team had already made sure the stimulus would direct record funding to all of them.

  Obama was not the first politician to propose any of them. In fact, except for his early opposition to the Iraq War, little about his policies had set him apart from his more experienced rivals in the Democratic primary. His agenda was largely the center-left Democratic agenda of reversing the Bush era, reviving the middle class, and investing in the future. Obama cared deeply about policy, devouring briefing papers, pressuring his staff to schedule “think time” with experts. But he wasn’t a policy entrepreneur, and his campaign wasn’t about new ideas. It was about his unswerving message of Change, as well as that aspirational We Can Believe In addendum, the sense that maybe this guy would follow through on the familiar ideas that never seemed to go anywhere.

  And he has. On policy, he’s mostly done what he said he’d do.

  This is not in itself a defense of Obama. FDR broke promises as casually as he broke bread; he wouldn’t be lionized today if he had kept his ill-advised promises to maintain the gold standard and balance the budget during a depression. To say that Obama’s approach has been more straightforward is certainly not to say it’s been more successful. But unlike FDR, he came into office with a well-defined theory of the case, and he’s tried to put that theory into practice. The best way to understand the Recovery Act—and the Obama presidency—is to understand that theory of the case, both his general principles and the specifics he laid out on the trail. Perhaps this lacks a certain drama, but Obama got his No-Drama reputation for a reason.

  A Reconstructed Liberal

  Who is Barack Obama?

  To the paranoid precincts of the right, he’s a Marxist, a secret Muslim, a madrassa-schooled Kenyan who hates white people and the Pledge of Allegiance. Prominent Republicans, without endorsing these delusions, have often suggested that speculation is bound to swirl around such an international man of mystery, that Obama is “a president we know less about than any other president in history.”21

  That’s a crock. We know plenty about Barack Obama.22 Thanks to the daft controversy over his citizenship, we know he was born in Honolulu at 7:24 P.M. on August 4, 1961, and his life story doesn’t get much murkier after that. His pet ape in Indonesia was named Tata. He used to smoke Marlboro Reds. He had enough heart to work as an organizer in a Chicago housing project for $13,000 a year, enough brain to graduate magna cum laude from Harvard Law School, enough ego to tell an adviser he “could probably do every job on the campaign better than the people I’ll hire.”23 As Biden would say, Obama’s life is literally an open book.

  Before he entered politics, Obama wrote a memoir called Dreams from My Father, a travelogue of his emotional journey to manhood. It’s a raw chronicle of his inner turmoil as an out-of-place kid in Hawaii and Indonesia, a confused college student at Occidental and Columbia, and a callow community organizer trying to find himself in inner-city Chicago. But it’s written in the mature voice of a law professor who clearly had found whatever he was looking for. He knew how silly he had sounded back in the day, blathering about “white folks this and white folks that,” whining about the patriarchy with punk rock performance poets.24 His revelations about using cocaine, flirting with racial militancy, and attending socialist conferences drew attention, but his moral of the story was that he had moved on from that nonsense.

  The Audacity of Hope, a political manifesto written after Obama’s election to the Senate, provides a more relevant tour of his worldview as a Democrat who believes in evolution and global warming but also believes his party can be smug and dogmatic. It’s partly a nonpartisan critique of Washington’s win-the-news-cycle culture of conflict, partly a liberal defense of government as a force for economic security and opportunity, sprinkled with caveats about the blind spots of the left. It makes the case for a politics rooted in common ground and common decency, with pragmatism as its lodestar: “We should be guided by what works.”25

  Aside from the wingnut screeds claiming that a Vietnam-era terrorist ghostwrote Dreams from My Father, or that Obama’s rage was forged by the anticolonialism of the father he barely knew, most independent excavations of Obama have unearthed portraits fairly consistent with his self-portraits.26 They reveal a confident (some say arrogant), ambitious (some say overly so), and intelligent (everyone agrees on that) politician with an eye-in-the-storm aura of calm and a carefully calibrated mix of idealism and realism. He comes off as relentlessly, almost comically reasonable, a born conciliator who assumes that just about any difference can be bridged through rational discourse. He’s clearly a calculating pol, not a crusading saint; although he navigated the cesspool of Chicago politics without getting filthy, he didn’t rage against the Democratic machine. But he just as clearly emerged from his angst-ridden formative years as a levelheaded grown-up who’s comfortable in his own skin.

  I’d love to reveal some previously hidden Obama pathology, but my sources mostly describe the same cerebral, low-blood-pressure, somewhat aloof alpha male. They marvel at his uncanny ability to boil down a meeting to its essence. They chuckle at the authoritative way he starts sentences with, “Look,” as if you’d surely agree if you just saw what he was saying. They emphasize his show-me-the-data empiricism and half-a-loaf pragmatism, but also his desire to help others.

  “I worked for Ted Kennedy, the gold standard for caring about people, and Barack didn’t emote the same way,” says economist D
aniel Tarullo, an Obama campaign adviser who is now a Federal Reserve governor. “But he was always thinking about the guy who lost his job in the Maytag factory in Newton, Iowa.”

  Obama has a more analytical, businesslike—some say bloodless—approach than feel-your-pain politicians like Kennedy, Biden, or Bill Clinton. He doesn’t pound his fists or draw many lines in the sand. It’s not his way, and he doesn’t think it helps the guy from the Maytag factory. As an organizer, he helped poor people seek better government services with an unusually nonconfrontational style. At Harvard, he was elected to lead the Law Review because conservatives felt he’d treat them fairly. In the Illinois legislature, he had a liberal voting record, but was known for brokering bipartisan deals. He followed a similar path in the U.S. Senate, voting the Democratic line while working with Republicans like Richard Lugar of Indiana on nuclear nonproliferation and Tom Coburn of Oklahoma on government transparency. His MO hasn’t changed much.

  Obama’s aides do acknowledge that there’s something vaguely enigmatic about their boss. He’s so modulated, so left-brain, so unruffled. They admire him, but they’re not sure they truly know him. How did such an alienated young man become so anchored in middle age? Did he find peace by marrying Michelle? Did he repress his emotions to avoid angry-black-man stereotypes?

  Honestly, I have no idea. For this book, the fact that he ended up anchored seems more relevant than his mysterious journey to anchored. And the most relevant aspects of his biography are his beliefs, which are not so mysterious.

  Obama’s mother, Ann Dunham, was the warmhearted wellspring of his social conscience, teaching him needlepoint values like empathy and compassion.27 She was also a self-proclaimed “unreconstructed liberal,” a Ted Kennedy liberal, an imagine-the-Pentagon-had-to-hold-a-bake-sale liberal. Obama portrayed her as a naive romantic who gave money to every beggar in Indonesia, “a soldier for New Deal, Peace Corps, position-paper liberalism.” She later became a respected anthropologist, but Obama distanced himself from the bleeding-heart ethic he associates with her. In The Audacity of Hope, he chided Democrats “who still champion the old-time religion, defending every New Deal and Great Society program from Republican encroachment.” He championed a less purist liberalism, reflecting more practical influences—like his grandmother, Madelyn Dunham, a blunt-spoken Midwesterner who worked her way from clerk to vice president of a bank, and his step-father, Lolo Soetoro, an Indonesian oilman who warned him that the world is cruel and lofty ideals are luxury goods.