The PDQ Presidency

The oath of office notwithstanding, the Obama Presidency began Nov. 4—not Jan. 20.

PHOTOS

Is Obama Keeping His Promises?

One year in, a look at how the president is doing.

Quiz: Barack Obama’s First Year

 

By Jonathan Alter | NEWSWEEK

Published Oct 24, 2009

From the magazine issue dated Nov 2, 2009

 

 

Election night 2008 went late in Chicago. Many campaign staffers who had spent two years helping Barack Obama get elected celebrated in Grant Park until the wee hours. But if senior aides were under the impression they might get the following day off, they were mistaken. Obama's transition director, John Podesta, scheduled a senior staff meeting for the next morning, Wednesday, Nov. 5, at 10:30 a.m. Podesta, Bill Clinton's former chief of staff, figured it would take a half hour, 45 minutes tops, to bat around some scheduling options and maybe even tell a few war stories from the campaign. But the soon-to-be commander in chief had other plans. To him, Wednesday was another workday—or, more precisely, the first day of his presidency.

Obama had been secretly plotting his transition since the spring of 2008. He enjoyed reciting the line from the 1972 movie The Candidate in which Robert Redford turns to an aide just after winning the election and mournfully asks, "What do we do now?" Obama insisted that he would not be that man. He had launched a massive transition project involving more than 200 policy wonks offering advice. Everyone knew Obama intended to get going quickly after the election. They just didn't expect that "quickly" to Obama meant hours, not days. Podesta was stunned when the 30-minute meeting turned into a four-and-a-half-hour planning session. On day one, Obama was prepared to narrow most of his cabinet choices to two or three names and move ahead to big policy decisions.
Normally a new presidency begins with the inauguration in January. But Barack Obama's tenure really started in November, a full year ago, when he became the de facto co-president of the United States. Obama couldn't yet sign bills or issue executive orders. He and his family couldn't sleep in the White House. Having resigned from the Senate, he was technically a private citizen— a man with no constitutional authority. But these were formalities. For the first time in modern American history, an incoming president made some of the most important decisions of his term—about the economy, mainly, but also about energy, education, and health care—before taking office. If "to govern is to choose," as John F. Kennedy said, then Obama was already governing.
"We only have one president at a time," Obama insisted repeatedly before he was inaugurated. While this was the right thing to say, it wasn't really true. During the 1932–33 transition, as the banks collapsed and the nation slid deeper into the Great Depression, Franklin D. Roosevelt said something similar and he meant it. FDR refused to cooperate with outgoing president Herbert Hoover in rescuing the financial system, and he made no decisions before his inaugural about how he planned to stimulate the economy. He even spent an important stretch of the transition on a yacht. Obama considered that approach and rejected it (though he did take a Hawaii vacation). He decided to work with President Bush on the TARP bank bailout, and he committed the nation to hundreds of billions in stimulus spending in a recovery bill to be signed not long after he was sworn in.

The big question for Obama was how large his recovery package would be. In early December, Pennsylvania Gov. Ed Rendell suggested a pie-in-the-sky stimulus of $165 billion and was amazed when Obama didn't bat an eye. In fact, the president-elect and his team had already agreed on a figure twice that size. Then they more than doubled it again, to about $800 billion—so that the cost went past what had been spent by the United States over five years in Iraq and Afghanistan.
Obama's leadership style falls somewhere between Bill Clinton's wide--ranging deliberations and George W. Bush's snap judgments. His ability to integrate complex facts, summarize competing arguments, then announce a crisp decision impressed the more experienced officials around him, including Joe Biden. After one conference call about the economy in early December, the vice president–elect and two-time presidential candidate told his aide Ron Klain, "We got this ticket in the right order."
But the breakneck pace carried a price. Many so-called shovel-ready construction projects often weren't actually ready to go. Had Obama taken a bit more time, he might have been able to think harder about job creation, which has become the big economic challenge of late 2009. During the transition, Obama officials failed to persuade congressional Democrats to offer tax credits to employers for each new person they hired. And his economists rejected WPA-style government hiring programs out of hand. So when unemployment later approached double digits, they were caught without a backup plan.

Obama knew how bad things could get. At a fateful all-day meeting on Dec. 16 at his Chicago transition headquarters, Christina Romer, soon-to-be chair of the Council of Economic Advisers, told him that without an ambitious plan, the United States could experience another depression. The same day, incoming budget director Peter Orszag turned 40 and Obama's climate-change "czarina," Carol Browner, turned 53. Obama knew it was Orszag's big day, and brought him a cake. Orszag also received final approval for the huge stimulus and a budget deficit that would total about 3 percent of GDP. (By agreeing to 3 percent, Obama was condemning himself to tight budgets for the rest of his presidency.) When Obama learned it was also Browner's birthday, he joked that his gift to her was the "smart grid."
Obama agreed with Al Gore that boosting clean energy wouldn't mean much without building a new network of national transmission lines. The real goal, he thought, should be to make the grid a huge growth engine—akin to the interstate-highway system in the 1950s or the Internet in the 1990s. He liked to talk about thousands of miles of lines and 40 million "smart meters" across the country. But in early January, top transition staffers in Washington held a videophone conference with Obama in Chicago. The regulatory hurdles to modernizing the electrical grid were beyond belief. It turned out that no fewer than 231 different state and local regulators had to sign off on any big changes. Obama was appalled. "We went to the moon!" the president-elect said. "We can do better than this…Let's make this a national priority—it's gonna create lots of jobs!''

One aide felt she had witnessed the president-elect's first "leadership moment." The staff went back to experts and repeated Obama's message: we can do better! But they couldn't. In the end, the stimulus included about $11 billion for smart-grid development, more than ever before but not much of a down payment on a $2 trillion project (most of it to be paid by the private sector).
Obama did better on education, and not just by committing $5 billion to reform. When Arne Duncan, soon-to-be secretary of education, went to see Obama in Chicago, the president-elect said he had two principles. First, all education policy should revolve around kids, not adult interest groups. This sounded simplistic but was in practice profound. Through this lens, every divisive question in education was much clearer. Higher teacher pay? That was good for kids because it would attract better teachers. Contracts that barred paying effective teachers more than those with seniority? Bad for kids. Obama's second principle was to avoid putting a stick in anyone's eye. "Let's engage, not attack," he said. This two-pronged approach yielded quick results. By the end of 2009, nine states, fearing a loss of money, lifted their caps on charter schools. A new era in school reform was underway.
Critics say that Obama's hurry to inject money into the economy resulted in wasteful spending. But contrary to public perception, the vast bulk of stimulus spending went to worthy programs, including long-neglected infrastructure projects like roads, bridges, and local sewage systems. It also included one of the largest tax cuts ever. But here Obama was hampered by political naiveté. Instead of holding his cards close, the president-elect offered huge tax cuts from the get-go—giving Republican critics what they wanted nearly three weeks before taking office. "He should have said, 'Here's the thing: no tax cuts,' " says close friend Marty Nesbitt. "And then he could have said, 'OK, you make some solid arguments—OK, it's $280 billion.' " (The final bill called for $288 billion.) That way, Obama could have made the tax cuts a useful bargaining chip, Nesbitt says, though he doesn't believe the Republicans were ever negotiating in good faith.
Before the inauguration, Obama had one more presidential-level task: persuading Congress to adopt the second half of Henry Paulson's $700 billion TARP program. This was $350 billion that Obama would need to complete the bank bailouts and, after forcing bankruptcies, rescue the auto industry. Obama knew the bailouts were deeply unpopular, but he was convinced that without them the banks would likely collapse. So he buttonholed legislators as though he were already president and won a close vote. Obama neglected to press the banks for something in return, thinking he could do that later. But by then, federal guarantees were already in place, and the president had lost his leverage.
Obama received daily intelligence briefings during the transition, but he made fewer decisions on foreign policy than on domestic matters. On healthcare reform, Obama's determination to overrule his political advisers and move forward ambitiously in 2009 wasn't clear to many staffers until after the inauguration. He had said during the campaign only that he would enact reform in his first term. But in truth, he made a firm decision on election night. According to a senior aide, he resolved then to tackle health care during his first year in office—a year that had already begun.
Alter is at work on a book about Obama’s first yea