There’s Much Left to Be Completed
The Political Events of 2009 Point Toward Potential 2010 Actions
By Jimi Grande
The beginning of the new year affords us an opportunity to pause for a moment and consider the events of 2009 with the perspective of distance. With the historic election of President Barack Obama and the large congressional majorities that his party won, Washington was prepared for an extraordinarily busy year characterized by grandiose ideas and a slew of impressive accomplishments. Certainly, it was a busy year for all of us on Capitol Hill. And certainly there were many ideas on an ambitious agenda. However, the list of legislative initiatives that were actually completed remained modest. With an election looming in just 10 short months, there remains much on President Obama’s proposed agenda that needs to be finished – the clock is ticking.
As President Obama took office, the country was forced to deal with a severe recession, frozen credit markets, and collapsing financial companies. His first decision was to continue the bailout policies that had been launched under President George W. Bush in an attempt to stabilize our crumbling financial system. When the hemorrhaging began to slow, the Obama administration proposed a major initiative to help kick start the economy – the controversial $787 billion stimulus bill. Written almost entirely by the Democratic leadership in Congress, the stimulus passed the House with no GOP support and then limped through the Senate with only three moderate Republicans voting in favor. Still, it was seen as a crucial victory for President Obama early in his first year.
Although the initial indications were that the next issue would be the reform of the financial services regulatory structure, the administration instead pivoted to address climate change with cap-and-trade legislation. Climate change had been one of President Obama’s key issues during the campaign, and it is possible that he saw a chance to use his success on the stimulus to help push this highly controversial issue through Congress. However, because cap-and-trade was seen as a job killer in industrial states already suffering from heavy job loss, the House of Representatives passed a bill by only seven votes and the bill was dead on arrival in the Senate.
As this initiative died in Congress, the Obama administration swiftly shifted to the issue of healthcare reform, citing the rising costs of healthcare as a major factor preventing economic recovery. Reform efforts were seen by opponents as new and expanded entitlement programs that threatened to destroy the quality of medical care and drive our country further toward bankruptcy. The debate consumed America and made it clear to representatives and senators that this would not be an easy issue to resolve. The Congress – although remaining in Washington until almost Christmas – was unable to send a completed bill to the president’s desk for his signature.
When the healthcare reform debate began to stall, the Obama administration returned to plans to pass the most comprehensive overhaul of the financial services regulatory structure since the New Deal. The reforms include the creation of a new federal systemic risk regulator, a massive expansion of the government’s authority to resolve troubled financial institutions, the creation of a Consumer Financial Protection Agency, and the creation of a new federal office of insurance. The House version of this legislation was completed and passed in late December, but the Senate failed to pass comparable legislation before the year was over.
With so much unfinished business, the agenda for 2010 has already begun to fill. When Congress returns, healthcare will still be the number one priority. They will also be attempting to wrap up regulatory reform in the spring while working on new initiatives focused on job creation and economic improvement. The Obama administration wants to see healthcare and financial services regulatory reform get to the legislative finish line so they can point to some real accomplishments. That being said, President Obama and congressional Democrats understand the country is more concerned with the continuing unemployment rate and government spending and will attempt to shift to solutions addressing those issues as quickly as possible.
Also, the Bush tax cuts are set to expire in 2010, and the question of what to do about that remains unanswered. Allowing them to expire amounts to a tax increase, but with soaring deficits and the country increasingly wary of more government spending, the president will be faced with some difficult choices that may well divide his congressional majority from the mood of the nation. Add to that an escalating conflict in Afghanistan, talk of taking on immigration reform, and a desire to tackle deficit reduction, and one might begin to wonder if this is the plan for the next year or the next five years.
With the 2010 elections just around the corner, there is immense pressure for Congress and the administration to accomplish as much as possible as quickly as possible. Due to the requirements of campaigning during an election year, Congress only has until the summer to complete most of its substantive work for the year before politics completely takes over. So 2010 will be a much shorter legislative calendar than 2009 was, with even more left to do. Adding to the pressure is the fact that right now the Democrats enjoy a 41-seat majority in the House and have already lost their supermajority of 60 votes in the Senate following the special election in Massachuesetts. Even if the Republicans do not recapture the majority in either house, a smaller majority will make it more difficult for the Democrats to pass many of their key proposals. Also, following the rather thin list of accomplishments from 2009, it will be politically important for President Obama to get something done as well.
If Congress continues to focus on issues that are only obliquely related – or not at all related – to job creation and reigning in spending, they will continue to appear out of touch with the people. This can have devastating effects during an election year. Balancing the need for legislative accomplishments with what is politically appropriate and feasible is a complex proposition. If the president and Congress allow themselves to listen too closely to the ticking of the clock, time may indeed run out for their ambitious agenda.
Jimi Grande is senior vice president, federal and political affairs for NAMIC.
infocus:advocacy is written by members of the NAMIC federal and political affairs department. The intent of this column is to educate and inform NAMIC members on current events in federal government. The column appears regularly in the magazine.