President Obama has a limited amount of time to accomplish his second-term goals, so there’s no time like the present to go big.
Admittedly it is absurdly early to be suggesting that President Obama’s second term is at a crucial fork in the road. But I think that’s where we are and here’s why.
Second presidential terms are two years, not four years. Second terms have rarely been resounding successes. Sometimes the reason is too specific to be generalized. More often, the reasons have included scar tissue, fatigue, and a dwindling bench. The American people get sick of the same faces, the old players are exhausted and have spent whatever intellectual capital they came with, and the new players aren’t as good as the old players. But, always, the underlying direction is declining political capital. Senior American politicians, regardless of party, are as a class or caste the most self-referential, self-reverential, and self-regarding group our species has known in its roughly 100,000 years on the planet. They have an uncanny capacity to sniff out the exact nano-second that power begins to ebb, no matter how slightly, and then act to accelerate that ebbing.
So President Obama has two years, not four, to get anything big accomplished, and that means he has to say what it is — now.
There are three obvious mega strategies. Whether the president’s political advisors know it or not, the choice between these three is the big decision they are making right now.
1. Beat up the Republican party with the hope of fracturing it completely or simply clobbering it in the 2014 Congressional elections. This seems to be the preferred direction right now.
2. Accomplish a series of individual policy wins — pick among immigration reform, preschool education, a small infrastructure plan, or even a carbon tax.
3. Change the political/policy game in America and give the country a new story.
That first goal is an emotionally satisfying choice and no group deserves clobbering more than this era’s Republicans right wing. But it may not be possible and it may not help achieve real policy goals as much as one might think. The Democratic left is nowhere near as unpleasant as the Republican right, but it is just as mired in a 60-year-old, outdated ideology. And this strategy doesn’t constitute much of a legacy for President Obama.
The second goal is highly worthwhile and may be all anyone can accomplish in today’s dysfunctional Washington. If President Obama achieved significant legislation in each of the four areas I named above, he would have achieved more than any of the last three, maybe four, second-term presidents going back at least 50 years.
The third goal — a new vision or story of America — sounds so over-reaching as to be preposterous. But I believe we are at a moment when this is possible: a time of immense global change, an improving economy with better prospects than any other developed economy in the world, a gridlocked political environment locked into interminable debate over the wrong issues, a high level of American citizen dissatisfaction with our politics, and a popular second term president with room to maneuver. We are unlikely to see this confluence of circumstances again for another 50 years.
Two points about these mega strategies: They are in part mutually exclusive and path dependent. And only a president can outline them and carry them out. Certainly strategy 1, on the one side, and strategies 2 or 3 are mutually exclusive. In terms of how politics and human beings work, the president cannot decide to beat the Republicans up for a time and then change gears and directions. But strategies 2 and 3 are not mutually exclusive. President Obama could present a new American story and then move to a set of specific policies. In fact, this might be the best course for accomplishing anything.
I believe that right now, the president could do two big things that, if successful, would make his second term successful, have high odds of being successful, and would have low costs if they aren’t successful. First, he could offer a real deal to stop sequestration and, second, he could define the next era.
Lets start with sequestration. This is a manufactured crisis — a set of automatic budget cuts that will make our defense, international, and domestic programs worse (in fact, the set was designed to make everything worse) but on the other hand will do next to nothing about our long-run debt and deficit problem. It was a last-ditch, desperate effort 18 months ago to look as though something was being accomplished. Its big flaw — other than being completely irresponsible — was that if it were going to force a real resolution, it always depended on the president defining a deal. Congress is not capable of doing that. All Congress can ever really do is the short-term, kick it down the road for three months efforts being thrown out today. These are worthless.
Now is the moment for the president to put forward a real deal, with real entitlement reform. This means reductions in the long-term rate of growth in entitlement spending, some further defense cuts (I don’t think we should cut normal regular domestic spending, but it should certainly be rearranged), income tax reform where possible (but not much is possible), and a new source of revenues — a new tax. We cannot solve our debt/deficit problem and pay for the government we all know we are going to have without new revenues. I’ve always been a proponent of a highly defined, progressive value added tax (a VAT), and still am. But I think that a carbon tax would be the better choice right now. Why not raise $1 trillion over the next decade and simultaneously begin to solve our most pressing environmental problems?
But the president should define such a deal not as the be-all-and-end-all of his administration, but rather as a necessary step toward an era of safer, higher, more sustainable, more equitable growth. He could explain how achieving this growth is possible and why it requires both fiscal reform and investments in the future. He could demonstrate easily how the specific policies he stressed in his State of the Union fit into this long-run direction. He could show a deeper understanding of the real private sector. And he could emphasize that we have time to adjust to change if we start now. As an example, a real and credible 10-year debt/deficit plan is what we need, not an economy-breaking one or two year slash and burn plan.
I believe that a deal is there, waiting to be made. The adults in the Republican party know they are in a trap. Americans would support a deal (all the polls show that the American people are far less polarized on these issues than Washington is). Most Democrats would rather be talking about solutions and growth than waging these interminable budget wars. The president could get 1) a deal, 2) an agreement to stop the incessant budget warfare (by permanently canceling the sequestration and ending the constant debt ceiling threats), 3) the chance to create the coalitions necessary to accomplish his policies without constantly fighting the budget battles, and (4) an actual shot at defining the contours of America’s next era.
But the president has to decide and act. What strategy is he pursuing? What does the country need? What are second terms for?
Roosevelt Institute Senior Fellow Bo Cutter is formerly a managing partner of Warburg Pincus, a major global private equity firm. Recently, he served as the leader of President Obama’s Office of Management and Budget (OMB) transition team. He has also served in senior roles in the White Houses of two Democratic Presidents.
Obama image via mistydawnphoto / Shutterstock.com.