November 16, 2011 10:13 pm
Disillusioned with DC
By Richard McGregor and Anna Fifield
Barack Obama has a mountain to climb to win re-election, write Richard McGregor and Anna Fifield
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Barack Obama battles to create jobs to boost his flagging presidency
In the motorcade whisking him from Philadelphia airport to a school on the city’s edge earlier this month, Barack Obama might have been watching his re-election flash before his eyes. The US president skirted the inner city where some of his most loyal supporters are being tested by record unemployment levels; sped past leafy suburbs where white voters are spurning him in droves; and glided into a mixed middle class area struggling with the downturn.
Three years after being hailed as a political messiah, Mr Obama has a mountain to climb to win re-election. With confidence in politics, leaders and the nation’s direction at all-time lows, he is combating perilously poor levels of support, similar to those he faces in Pennsylvania, in the battleground states across the country that he must win in a year’s time to keep the White House.
“This administration has scored the worst readings on confidence and economic policies since the Nixon days,” says Richard Curtin, director of the University of Michigan’s Institute of Social Research. “The pessimism is longer and deeper than we’ve recorded before.”
The escalating economic crisis in Europe has overshadowed the fact that US political and budget reforms remain ensnared in partisan tangles. The creaky foundations of the economy, and the gridlock in Washington over how to tackle it, are being felt around the world, entrenching America’s retreat from leadership in everything from the Libyan war to the eurozone’s debt problems.
The instability extends to the Republicans, where the race to find a candidate to take on Mr Obama has lapsed into farce. Herman Cain, the former pizza company executive who is among the most popular of the party’s aspirants, this week struggled to answer a simple question about Libya, explaining he had “all this stuff twirling around in my head”.
The country’s political woes reflect more than frustration with the prolonged jobless recovery under Mr Obama, as the unemployment rate remains stubbornly above 9 per cent. Voters have swung wildly between Democrats and Republicans in the past three elections, institutionalising in politics a volatility to match the crisis of confidence in the economy.
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The latest average of polls asking whether the US is on the right track, collated by RealClearPolitics, found an overwhelming 73 per cent say it is not. Such questions tend to produce negative answers but Karlyn Bowman of the American Enterprise Institute says the duration of the negativity is entering uncharted waters. “Pollsters are beginning to see this seep into views about how their children will fare and it is calling into question the whole American dream,” she says.
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Such is the anger in the electorate that it is a dangerous time for politicians of any stripe to put themselves in the hands of voters. That could work in Mr Obama’s favour, as it means the Republicans will be in the line of fire in 2012 as well. Benefiting from anti-government sentiment, the Democrats won huge victories in the 2006 and 2008 congressional and presidential elections respectively, riding a wave of disillusionment with George W. Bush. In 2010 the Republicans took control of the House of Representatives in the November midterms.
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The two parties acknowledge that the pendulum could easily swing both ways next year – against Mr Obama in the White House and the Republicans in Congress at the same time.
Mr Obama inherited the financial crisis and the bank bail-outs; and, his opponents say, made the situation worse with a $787bn stimulus that failed to return the economy to solid growth. But a host of factors, ranging from the Iraq war to entrenched partisanship in Congress and the steady decline of middle-class income relative to the wealthy, has been eating away at the body politic for a decade.
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“There is volatility and it reflects both long-term and short-term political and economic trends,” says David Axelrod, Mr Obama’s chief campaign strategist. “The hollowing out of the middle class and the flattening of wages has been going on for 30 to 40 years. Go back and look at some of Bill Clinton’s speeches from 1991 – he was talking about the viability of the middle classes back then.”
Americans are starting to reduce long-term economic expectations in ways policymakers are struggling to get a grip on. They no longer expect their homes to rise in value for at least five years.
Geographical mobility, once a pathway to higher paying jobs, has dried up, with many households unable to sell their homes. The generational shift of manufacturing to Asia, especially China, means there are fewer jobs to move to anyway.
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.“People are more negative about economic changes than they have been since our records began in 1946,” Mr Curtin says. “The labour market is not just about the availability of jobs but about wage growth and being able to get a new job at a higher pay rate to further your career.”
Perennial optimists contend the country has always bounced back. The China threat? That’s what they said about Japan in the late 1980s. Recessions? The country has recovered from one after another to return to a position of strength.
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.But in a country whose global pre-eminence is part of the national character, the stream of gloomy fin de siècle stories that fills the media (“Is America Over” and “The End of the American Era”, to name two this month) sounds increasingly credible.
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-“People don’t have a sense of control,” says John Feehery, a Republican strategist. “They don’t know how to fix anything. They don’t know why the Greek financial crisis is having an impact on the 401Ks [pension funds].”
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Stan Greenberg, a Democratic pollster, says people have been breaking down and crying during focus groups when talking about the economy. Unlike Mr Feehery, he senses many have developed their own strategies for managing the slump – and are furious Washington cannot do the same. “There’s a belief that it’s not permanent, that we will figure out a way to get to a better place or the country will come back. This is one of the reasons for the tremendous anger at our political leaders,” he says.
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A report from Democracy Corps, the polling group of which Mr Greenberg is chairman and chief executive, points out that sentiment on the economy is the strongest predictor of voting habits.
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.“Republicans get a serious audience with voters when they talk about spending, deficits, small government and letting small business prosper,” it says. “Democrats are losing the economic argument because right now voters do not see how increased spending helps the economy and they fear increased debt will prevent the economy from growing.”
Mr Obama took a battering in August in the standoff with Republicans over increasing the US’s borrowing limits that brought the country to the brink of default. It was a battle, over debt and deficits, fought firmly on the Republicans’ turf.
Freed from the imminent threat of default, Mr Obama is finally refining a response, delivered in person to voters in Pennsylvania earlier in November in the same way he has been barnstorming the country for the past two months. This time, he is trying to shape the battleground in his favour.
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In the former church hall in a largely African-American district in Delaware County, Pennsylvania, Mr Obama spoke of his initiatives in education to help children. In similar forays all over the country, he has pushed programmes to hire teachers, build new bridges and extend a cut in payroll taxes, part of a $477bn stimulus package designed to kick-start the economy in 2012, and contrast him with “do-nothing” Republicans.
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.“In order to get the budget under control, we have to make some hard choices – do we keep the Bush tax cuts for the wealthy rather than continuing to educate our kids, rebuilding the country’s infrastructure and investing in science and technology,” Mr Axelrod says.
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Mr Obama’s campaign aims to make the election a choice between two candidates, not a referendum on his first term. In the words of Republican strategist Dan Schnur, who advised former presidential hopeful John McCain, the Democrats want to “disfigure the Republican nominee beyond recognition”.
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The problem for the Republicans, he says, is that “their own popularity is even lower than Obama’s. It’s one thing to say you’re not very tall, but it’s all relative. If you’re the tallest jockey on the racetrack, you’ve got a problem.”
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In addition to parties with rival visions for the country, the US also has competing grassroots movements – the Tea Party, which energised the Republicans after Mr Obama’s victory, and now the anti-capitalist Occupy movement, which the Democrats have cautiously embraced and which has even influenced Republican rhetoric.
The former remains a bedrock of Republican support, even as some of its elements resist being subsumed in- to the party. “All the issues that motivated the Tea Party into existence are the same issues that are making independent voters swing against Obama now: the economy, government spending, job creation,” says Matt Kibbe, president of FreedomWorks, a Tea Party-aligned group.
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But the radicalism of the Republican revolution is sparking its own backlash. Voters in Ohio last week voted down a plan by the state’s Republican governor to end collective bargaining rights for public sector unions. Unions plan campaigns in states undertaking similar measures.
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Then there is Mr Obama himself. As he reminds people, his chances of being re-elected are probably much better than his chances of being elected in the first place.
For his diehard supporters in Pennsylvania, he still casts the same spell he did four years ago. “I thought after I saw him the first time, it would not be exciting any more,” says Shirley Bright, one of his campaign workers. “But it still is.” The president can only hope that enough people agree.
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Budget standoff: Quest for a compromise that remains elusive
The end game being played out this week on Capitol Hill over the machinations of the so-called super-committee underlines the most important dividing line in US politics – how to cut the budget deficit, writes Richard McGregor.
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The bipartisan congressional panel, which has six members each from the Republican and Democratic parties, was tasked to report by November 23 on how to slice $1,200bn off the deficit over 10 years.
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To meet that deadline, the committee needs an outline of an agreement by the end of this week, to prepare legislation which then has to get through Congress by year’s end. So far no deal is in sight, despite glimmers of hope.
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The problem is the same one that has dogged the system for a generation – whether the deficit should be paid for by cutting spending or raising new tax revenues.
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The Republicans on the super-committee are adamant that they will not support raising tax rates in any form. “It’s just not going to happen,” said the Republican co-chair, Jeb Hensarling, on Wednesday.
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Even a compromise put forward by Senator Pat Toomey of Pennsylvania, one of the most conservative Republican committee members, has attracted criticism. He proposed raising new revenues by closing tax loopholes, in return for large spending cuts and an extension in perpetuity of the tax cuts of the George W. Bush era. Mr Toomey’s proposal attracted a stern rebuke, with a letter circulated among Republicans in Congress condemning new revenues in any form.
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While raising tax rates is taboo for Republicans, Democrats have their own no-go areas. Many will not countenance touching Social Security in any form, even though the two sides are not far apart on how to reform the pension programme.
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Equally, they are reluctant to restructure Medicare, which provides healthcare for the elderly, even though the programme will add more to federal spending than any other programme in coming decades.
The Democrats see short-term electoral advantage in standing up for Social Security and Medicare, and so will not compromise.
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The most likely outcome is a plan by Mr Hensarling to agree on a broad outline of cuts and revenues, and give it to another committee to fill in the details. For Congress, it will be chalked up as yet another failure.
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