The Power of the President
(A scene from the debt ceiling battle.)
Progressive organizations based in DC have historically focused most of their attention and political muscle on fighting legislative fights, getting Congress and the President to get new legislation passed or stop legislation they don’t like from passing. That will of course need to be part of the progressive movement’s agenda over the next two years, especially when it comes to fiscal policy and immigration reform, but with the House in the hands of far right Republicans and the Senate rarely able to move at all, I believe that with a few exceptions, much more of our attention needs to be focused on pushing the President to use the power he has to use executive action to improve the economy and fight for the middle class.
Case in point: there was an important article on the front page of the Washington Post on the 23rd, an article about how several of the leading economists in the country had advised the President in the first term that the biggest reason the economy hadn't recovered as well as hoped was the overhang of unsustainable housing debt on homeowners because of the collapse of the housing bubble.
In a revealing sequence, the story describes how the President opened the meeting saying he wanted to hear their honest policy advice not bound by what they thought was politically feasible, that the gathered economic experts strongly encouraged him to do more to explore a far bigger mortgage debt forgiveness plan, and that Treasury Secretary Geithner immediately said nothing that ambitious was politically possible because you couldn't get a bill through Congress.
Although this particular meeting had not been reported before the WP piece on Friday, the recommendations by these top economists are hardly news: mortgage debt writedowns have been something that a wide range of economists from right to left have been pushing ever since the collapse of the bubble. The weakness of policy initiatives in this area is undoubtedly the biggest economic mistake the administration made in the first term.
But there is a bigger problem that the story of this meeting highlights as well. Throughout Obama's first term, according to administration officials and those economic policy people who have met with the administration that I have talked with, a variety of administration officials led by Geithner have been consistent voices of saying why things can't get done when it comes to policies that would be tougher on Wall Street banks and/or spur the housing market's recovery (which, not coincidentally, would also cost the biggest banks a lot of money at least in the short term). Sometimes Geithner's excuse, as it was reported to be in the meeting with top economists, is that nothing can't get through Congress; sometimes it is just that the administration lacks the power to act for a wide variety of other reasons.
Of course the first excuse doesn't explain why the administration did not lift a finger to help their closest Senate ally, Obama's mentor in the Senate Dick Durbin, pass the so-called "cramdown" bill, which would have made it far easier for judges to force banks to write down mortgage debt- the bill's failure prompting Durbin's famous complaint that "the banks own this place". And it doesn't explain Geithner and the administration's failure to support many of the strongest amendments on the Senate floor and in conference committee during the fight to pass financial reform. While it is true that there are plenty of things which will not pass Congress, when the administration had a legitimate shot at getting things done that would have helped the economy's banking and housing problems, the sad truth is that they just failed to do them too much of the time.
The second excuse is simply wrong, but unfortunately we are going to hear it a lot the next four years from conservative, pro-special interest Democrats in and out of the administration. The question in front of the President as he gets ready for his second term is whether he will be willing to ignore those voices and be willing to use the real powers of the executive branch to get things done to lift this economy and stand up to the wealthy special interests on Wall Street and elsewhere.
