This month, President Barack Obama signed into law a financial reform bill aimed at preventing another financial crisis. It cost him financial backers on Wall Street, but gave consumers new protections and government more regulatory oversight powers. The financial reform bill came on the heels of the hard-fought health-care reform law, which for the first time provides insurance coverage for all Americans. That in turn followed the successful rescue of the U.S. automotive sector and a massive stimulus bill full of Democratic policy victories, like a huge expansion of federal support for environmentally friendly energy technologies. In his first year and a half in office, Obama put the first Latina on the Supreme Court and is on track to have three women on the top court for the first time in U.S. history. He reached an arms control deal with the Russians and picked up a Nobel Peace Prize. It’s been decades since any president has accomplished so much so quickly—and all this without headlines about West Wing interns.
And yet, the White House is on the defensive. Even as the financial legislation worked its way through Congress to the President’s desk for signature, White House spokesman Robert Gibbs was being taken to task for admitting on a Sunday morning talk show that Democrats could lose the House of Representatives in mid-term elections this November. House Democrats were livid. Headlines used words like “panic” and “white flag.” But sadly for Obama, Gibbs was merely stating the obvious.
It is unremarkable for a president’s party to lose some seats in mid-term elections—a time when voters typically take their discontent out on incumbents. But this one could be particularly ugly for Democrats. Despite his legislative successes, Americans have been turning on Obama. His drop in approval in his first 12 months, from the mid-60s to the low 50s—or less in some polls—was one of the sharpest for a newly elected president over his first year. Now, 18 months after his inauguration, fewer than half of Americans approve of his job performance, and he is almost as acidly unpopular among Republican voters as former president George W. Bush was with Democrats in his second term.
Most importantly, Obama has lost the crucial independent voters whose support helped propel him into the White House—slightly more than half disapprove of his job performance.
And between the crippled economy and the drawn-out struggle to stop environmental catastrophe in the Gulf of Mexico, confidence in Obama has been deeply shaken. According to a Washington Post-ABC News poll in July, nearly six in 10 voters say they lack faith in the President to make the right decisions for the country, while a majority disapproves of how he is dealing with the economy. Quite a reversal since the start of his presidency, when about six in 10 expressed confidence in his decision-making. Obama now finds himself at about the same place president Bill Clinton was in the summer of 1994, a few months before Republicans captured both the House and Senate.
Obama is under siege from both the ideological right and the left. Conservative critics accuse him of going too far, too fast to grow government and impose new regulations. A July poll for Fox News by Democracy Corps, the firm of Democratic consultants James Carville and Stan Greenberg, estimates that 55 per cent of likely voters believe the term “socialist” describes Obama “well” or “very well.” Former Alaska governor Sarah Palin, in an ad released on YouTube, tapped into anxieties over government takeovers of the economy by referring to “these policies coming out of Washington” as “this fundamental transformation of our country.” The U.S. Chamber of Commerce, a tribune of big business, which had stood with Obama during the fight over the stimulus bill, has since turned on him.
The chairman of the board of directors, Tom Bell, accused the administration of a “general attack on our free enterprise system.” Chamber president and CEO Tom Donohue said that given health-care reforms and potential climate legislation, “the regulatory activity now under way is so overwhelming and beyond anything we have ever seen that we risk moving this country away from a government of the people to a government of the regulators.”
The big-spending, anti-business message has taken hold. A poll for the Third Way, a moderate Democratic think tank, by the Benenson Strategy Group, a firm that also polls for Obama, asked potential voters whether they would prefer a candidate in the mid-term elections who “will stick with President Barack Obama” on economic policies, or “one who will start from scratch with new ideas to shrink government, cut taxes, and grow the economy.” Sixty-four per cent preferred starting from scratch, compared with just 30 per cent who would stick with the Obama policies. The Greek fiscal crisis added a grim backdrop to the debate over the mounting federal deficit. And Obama’s US$787-billion stimulus plan—which drew not a single Republican vote in the House—is seen as less an achievement than a mistake.
For its part, the White House says it has created or saved between 2.5 million and 3.6 million jobs, including those of many teachers and police officers. Republicans called it reckless spending, while many Democrats believed it was too timid to give the economy the boost it needed. The bottom line: almost no one liked it. In a CBS News poll in July, 56 per cent of respondents said the stimulus hasn’t had an impact on the economy, and 18 per cent said it has made things worse. Only 23 per cent said it has made the economy better.
His central problem is that, constrained by Republican opposition and threats of filibustering in the Senate, Obama has pushed an activist agenda through compromises and trade-offs that have pleased neither liberals nor conservatives. Liberals believe Obama won a clear mandate in the 2008 election: to break with the policies of the Bush era. But Republicans argue that they are over-interpreting the election results—that the mandate was not for a break with Republicans, but to work with them. After all, Obama campaigned as a post-partisan leader who could transcend divisions between black and white and, as he put it repeatedly, between Red America and Blue America. That with his high-wattage smile and mixed-race background, he could bring the country together in ways that the polarizing Hillary Rodham Clinton, who carried her husband’s baggage, and John McCain, who had a lightning-rod running mate named Sarah Palin, simply could not.
Kevin Madden, a Republican strategist who worked on Mitt Romney’s presidential campaign, traces the moment that Republicans turned on Obama to a day three weeks into his presidency. On Feb. 6, Obama took his first trip aboard Air Force One, flying to Williamsburg, Va., a colonial town where 200 Democratic House members were holed up at a policy retreat. Obama ditched his prepared remarks and expressed frustration with Republican members of Congress, who had been opposing his stimulus spending and calling for more tax cuts. “Don’t come to the table with the same tired arguments and worn ideas that helped create this crisis,” he said to applause and whistles. As for complaints about deficit spending: “I found this deficit when I showed up, number one. I found this national debt doubled, wrapped in a big bow waiting for me as I stepped into the Oval Office.” He added: “If you’re heading for a cliff, you’ve got to change direction. That’s what the American people called for in November and that’s what we intend to deliver.”
Where Democrats heard a statement of their hard-won mandate for change, Republicans took it as a declaration of war. “He just lit into Republicans, and did so in a way where he created straw men, was hyper-partisan, and offered nothing but invective,” Madden says.
“You can’t underestimate how negatively his speech in Virginia was received and what that did to convince everybody on Capitol Hill that he was not serious about bipartisanship.”
Obama accepted some Republican suggestions in a bid to win Republican votes for the package, but not a single Republican went along. “They only took out certain troublesome provisions once they were ridiculed in the public square—like $1 million to reseed the National Mall. The more substantive proposals on tax relief were not included,” says Madden.
Democrats reject such Republican portrayals as a false history, noting that in an effort to win Republican votes, nearly 40 per cent of the stimulus package consisted of tax cuts rather than new spending. But the effort failed, and since the stimulus battle, Republicans have fought Obama’s agenda every step of the way. They are betting that voters, especially Independent voters, will be turned off Obama by the combination of big spending and failure to unite the country. “We’ve done focus groups and have a lot of empirical and anecdotal data suggesting that what really soured the American public is the cost of his policies—that at a time of economic slowdown we can’t afford it—and that the process was poisoned by partisanship,” Madden says. “They blame Obama for that because he promised to change Washington, and focus on solutions and not politics, and they don’t believe he’s done that.”
But where Republicans see overreach, many liberal Democrats see compromise and outright betrayal of campaign pledges and the promise of “change.” In an article that hit the American political blogosphere like a bolt of lightning this month, Eric Alterman, an English professor at the City University of New York, summed up the liberal grievances with Obama and called his presidency “a big disappointment.” Writing in the liberal magazine The Nation, Alterman said, “It’s possible that he fooled gullible progressives during the election into believing he was a left-liberal partisan when in fact he is much closer to a conservative corporate shill.” He listed Obama’s many compromises: to pass health-care legislation through the Senate, he betrayed his pro-choice campaign promises and accepted provisions that limited abortion rights. He also abandoned his insistence that health-care legislation include a government-run “public option.” Labour unionists were his most loyal foot soldiers, but the promise of legislation to make organizing easier is “deader than Jimmy Hoffa.” He noted there is still no cap on carbon emissions. While Alterman conceded that many forces have constrained Obama’s ability to carry out a more sweepingly liberal agenda—from the Republican filibuster threat in the Senate to corporate money in politics—he repeated comedian Jimmy Fallon’s joke that the President’s goal appeared to be to “finally deliver on the campaign promises made by John McCain.”
Meanwhile, left-leaning economists, such as the Nobel laureate Princeton professor and New York Times columnist Paul Krugman, have been making the case that Obama should have pushed for a larger stimulus, without which the country could head into a double-dip recession. They have been ignored. And more harsh words have been lobbed by the executive director of the American Civil Liberties Union, Anthony Romero, who told a conference of liberal activists in June that he was “disgusted” with Obama’s slow progress on civil liberties issues, and a lack of accountability for past violations. “Guantánamo is still not closed,” he later told the online newspaper Politico. “Military commissions are still a mess. The administration still uses state secrets to shield themselves from litigation. There’s no prosecution for criminal acts of the Bush administration. Surveillance powers put in place under the Patriot Act have been renewed. If there has been change in the civil liberties context, I frankly don’t see it.”
Obama got a C- on his first year in office from another liberal group, the Institute for Policy Studies, a think tank in Washington, which issued a report card in January. Dedrick Muhammad, one of the report’s authors, told Maclean’s the President deserves higher marks now on account of health care, but that many progressives remain dissatisfied. “The challenges he is facing are so grand and require such deep structural changes,” Muhammad says. “The administration has not stepped up and made the changes necessary to deal with a middle class in decline and the effects of decades of deregulation.”
Muhammad is also critical of what he calls the administration’s unwillingness to take on racial inequality—“not even in a public sense, but even behind closed doors.” And Muhammad says the White House will be faced with a more vocal left flank: “I believe it is incumbent on the left not to just be quiet and rally around Obama, but be out front of Obama because that is what conservative forces are doing—they are trying to move the country to the right. And the elected official has to play to the centre.” To that end, various civil rights groups, including the NAACP and other organizations, are planning a “jobs march” on Washington on Oct. 2. “It’s to remind people that that original  march on Washington wasn’t just about a dream of white girls and black boys holding hands,” Muhammad says. “It was about jobs.”
And jobs may be, in the end, what it’s all about for Obama, too. It turns out that his slide in the polls since his inauguration is not entirely unique. He has mirrored, almost, that of another modern president—Ronald Reagan. And that historical comparison offers hope, and a warning, for the current President. “The trajectory of their approval ratings is amazingly parallel,” says Charles Franklin, a political scientist at the University of Wisconsin and co-founder of Pollster.com. “Both come in the midst of economic crisis, both replace a deeply unpopular predecessor, both have big agendas to remake American public policy, and both continue to suffer economic difficulties throughout their first year of office.”
Indeed, by November 1982, Reagan’s approval rating had fallen to below 40 per cent—even lower than Obama’s is now. On the eve of the mid-term elections, the economy was in decline and the U.S. unemployment rate, above 10 per cent, was the highest since the Great Depression. Republicans lost 26 House seats that November.
But in the second half of his term, the economy began to grow, and Reagan was able to ride the rising tide to re-election. Supporters of tax cuts argue that his 1981 aggressive across-the-board tax cuts were to thank for the recovery, while Keynesians argue that it was the Federal Reserve loosening the money supply to bring interest rates down from levels as high as 21.5 per cent. In any case, the economy rebounded, and Reagan ran beautiful campaign commercials that proclaimed, “it’s morning again in America.” Americans witnessed successive quarters of robust economic growth. “The turnaround of the economy was certainly instrumental in his recovery,” says Franklin. “In the current circumstance, it’s a reminder that wherever Obama is today, things can turn around just as much as they did for Reagan.”
But there the similarity ends. Under Obama, the U.S. economy already bottomed in mid-2009. The fourth quarter of last year saw growth of 5.6 per cent—almost all of it restocking low inventories, and the first quarter of this year also grew at 2.7 per cent.
Despite the technical end of the recession, though, unemployment remains near 10 per cent, and the national mood is one of economic anxiety, not optimism. There are fears that a “double-dip” recession is just around the corner. “I think the Reagan lesson is that the trend in the economy in 1983-84 was so positive,” Franklin says, “Even though the absolute levels of unemployment were still high, they were coming down and GDP and real income were all rising sharply in that period—that positive momentum is why he could take credit and get political credit for it.”
Unless that happens, Obama faces a rough ride ahead. His next agenda items are unlikely to unite Americans behind them: energy legislation that may include some restrictions on greenhouse gas emissions; his plans to allow the Bush tax cuts for upper-income earners to expire; and immigration reform. Perhaps there was a spin strategy behind Gibbs raising the possibility of losing the House in November—given that analysts put the potential losses anywhere from 20 to 60 seats (Republicans need to gain 40 to take control, though GOP lawmakers are also polling poorly in this anti-incumbent climate). “It’s to the Democrats’ advantage to play up the possible losses,” notes Franklin. “Suppose they only lose 28 seats—that will be more than Reagan, but will look like a triumph.” And Obama could use one of those.