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Obama vs. the Washington Establishment

By Dan Froomkin
1:03 PM ET, 03/ 2/2009

In his radio and Internet address on Saturday (above), President Obama boldly -- and accurately -- cast his ambitious and profoundly course-changing budget proposal as an assault on establishment Washington and its entrenched interests.

"I realize that passing this budget won't be easy. Because it represents real and dramatic change, it also represents a threat to the status quo in Washington," he said.

And he made it clear that he is girding for the inevitable backlash: "I know these steps won't sit well with the special interests and lobbyists who are invested in the old way of doing business, and I know they're gearing up for a fight as we speak. My message to them is this:

"So am I.

"The system we have now might work for the powerful and well-connected interests that have run Washington for far too long, but I don't. I work for the American people. I didn't come here to do the same thing we've been doing or to take small steps forward, I came to provide the sweeping change that this country demanded when it went to the polls in November. That is the change this budget starts to make, and that is the change I'll be fighting for in the weeks ahead – change that will grow our economy, expand our middle-class, and keep the American Dream alive for all those men and women who have believed in this journey from the day it began."

It was his boldest acknowledgment yet of what is slowly becoming clear to the rest of us: That his proposals represent such a dramatic reversal from the course the nation has been following over the last eight years -- and even the last three decades -- that they will inevitably face intense resistance from Washington's traditional power centers.

And it's not just industry lobbyists, either, although Obama was most specific about them: "I know that the insurance industry won't like the idea that they'll have to bid competitively to continue offering Medicare coverage, but that's how we'll help preserve and protect Medicare and lower health care costs for American families," he said "I know that banks and big student lenders won't like the idea that we're ending their huge taxpayer subsidies, but that's how we'll save taxpayers nearly $50 billion and make college more affordable. I know that oil and gas companies won't like us ending nearly $30 billion in tax breaks, but that's how we'll help fund a renewable energy economy that will create new jobs and new industries."

It's arguably almost the entire Washington political and media establishment that finds itself on the defensive. A central part of Obama's message, in both his budget and his address to a joint session of Congress last week, has been that we find ourselves at a "day of reckoning" not out of bad luck or by happenstance, but as the direct result of Washington's profound irresponsibility.

It's worth revisiting Obama's explanation of "how we arrived at this moment" from that joint address:

"The fact is, our economy did not fall into decline overnight. Nor did all of our problems begin when the housing market collapsed or the stock market sank. We have known for decades that our survival depends on finding new sources of energy, yet we import more oil today than ever before. The cost of health care eats up more and more of our savings each year, yet we keep delaying reform. Our children will compete for jobs in a global economy that too many of our schools do not prepare them for.

"And though all of these challenges went unsolved, we still managed to spend more money and pile up more debt, both as individuals and through our government, than ever before. In other words, we have lived through an era where too often short-term gains were prized over long-term prosperity, where we failed to look beyond the next payment, the next quarter, or the next election.

"A surplus became an excuse to transfer wealth to the wealthy instead of an opportunity to invest in our future. Regulations... were gutted for the sake of a quick profit at the expense of a healthy market. People bought homes they knew they couldn't afford from banks and lenders who pushed those bad loans anyway. And all the while, critical debates and difficult decisions were put off for some other time on some other day."

The inevitable conclusion here is that establishment Washington is complicit in what went wrong. That includes all the people in positions of power who accepted what was happening as simply politics as usual -- even as the country was slowly but inevitably headed to that day of reckoning.

After all, since the Reagan era, even mainstream Democratic leaders have internalized the trickle-down, free-market, small-government mentality which Obama now blames for our woes. Few in the Democratic party -- or the mainstream media -- did much more than watch as the economic playing field tilted further and further to the advantage of the rich.

And yes, it's true that many of Obama's initiatives could well be described as pent-up Democratic goals. But you might also call them nearly-forgotten goals, as far as the current batch of Democratic leaders is concerned. Even when they controlled Congress, they failed to block budgets that turned out to be blueprints for disaster. And they either didn't fight for their principles or flinched in a pinch. I described some of their capitulations to former president George W. Bush in this December 2007 column. These very same leaders may well be motivated to -- at least -- complicate or modify Obama's proposals to validate their own previous inaction.

David E. Sanger of the New York Times sees how dramatic Obama's thinking is, writing that it may be "a postmodern, post-Clinton form of liberalism....

"If Johnson's rallying cry was an end to poverty in the world's richest nation, Mr. Obama's is an end to the Reagan Revolution. With the proposed tax increases on couples making more than $250,000, Mr. Obama has declared that trickle-down economics — the theory that the entire country benefits as the nation's richest amass and spend — was a fantasy. He denounced it in moral terms, declaring in his budget that 'there is something wrong when we allow the playing field to be tilted so far in the favor of so few.'"

E.J. Dionne Jr. writes in his Washington Post opinion column that Obama has "transformed the terms of the nation's debate.

"The central issue in American politics now is whether the country should reverse a three-decade-long trend of rising inequality in incomes and wealth."

So is the resistance to Obama's plans building in Washington? It sure is.

Business interests won't take this lying down. Greg Hitt and Jesse Drucker write in the Wall Street Journal: "'You don't build a house by blowing up its foundation,' said Bruce Josten, the [U.S. Chamber of Commerce]'s executive vice president for government affairs, who contended the plan would penalize small businesses and entrepreneurs....

"Exxon Mobil Corp. and other U.S. oil and gas companies would pay $31.4 billion in taxes over the next 10 years under a proposal to eliminate or scale back a range of tax-production incentives currently available to the industry. The energy industry is also a big beneficiary of a tax-accounting principle -- known as LIFO, or last-in-first-out -- which would be repealed, raising $61 billion.

"A spokesman for Exxon Mobil said higher taxes 'make it more difficult to invest in new energy supplies that are necessary to meet future demand.'"

(And yes, that's the same Exxon that posted an all-time record $45.2 billion in profits last year.)

Military contractors are running scared. Christopher Drew writes in the New York Times: "The big contractors 'are sitting on the edge of their seats,' said Gordon Adams, a professor at American University in Washington and an expert on the defense budget."

Polluters are gnashing their teeth. John M. Broder writes in the New York Times: "Business lobbies and many Republicans raised loud objections to the cap-and-trade program Mr. Obama proposed as part of his budget this week, saying the plan amounted to a gigantic and permanent tax on oil, electricity and manufactured goods, a shock they said the country could not handle during economic distress."

The health-care industry is gearing up for a possible epic confrontation. Robert Pear writes in the New York Times: "The powerful interests that dominate the health care industry could challenge even Mr. Obama's political deftness."

And the prospects in Congress are decidedly mixed.

Washington Post cartoonist Tom Toles illustrates the Capitol Hill bottleneck.

David Lightman writes for McClatchy Newspapers: "President Barack Obama's ambitious plans will face immediate political difficulty in a wary — and often parochial — Congress that's long resisted such fast, radical change.

"It's not only lawmakers who tend to resist overturning the status quo. An army of lobbyists, grassroots interests, campaign contributors and others who make up insider Washington await, all eager to express their views on why Obama's plans need to be amended, if not defeated.

"'He's going to get it from all sides,' said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a Washington budget watchdog group."

The New York Times warns of problems from both sides of the aisle. Peter Baker writes: "Some of his ideas have attracted criticism across party lines. Republicans deride the overall plan as a 'job killer' intended to revive class warfare, soak the rich and burden business too much at a time of economic hardship. The plan means 'the era of big government is back,' said Representative John A. Boehner of Ohio, the House Republican leader...

"Certain provisions in Mr. Obama's plan may strike special interests, but they also affect favored programs for Democrats as well as Republicans.

"Senators Kent Conrad and Byron L. Dorgan, both North Dakota Democrats, for instance, declared opposition to Mr. Obama's proposal to phase out agricultural subsidies for farmers with gross receipts over $500,000.

"Mr. Conrad, the Budget Committee chairman, said some tax increases on high-income workers 'may well not survive' and expressed concern about the buildup of debt."

Jo Biddle writes for AFP: "Republicans Sunday signaled they are ready to seize a gauntlet thrown down by US President Barack Obama over his whopping 3.55 trillion dollar budget, heralding a bruising Congress battle ahead...

"'What we see in this budget, frankly, is an attempt, again, to try and stimulate the economy through government expenditure. And, you know, at best what that can do is redistribute wealth,' Republican House minority whip Eric Cantor told ABC...

"Influential radio talk show host Rush Limbaugh, giving the keynote address at a leading conservative conference on Saturday, slammed the new administration's approach.

"'Ronald Reagan used to speak of a shining city on a hill. Barack Obama portrays America as a soup kitchen and some dark night in a corner of America that's very obscure,' he said."

Newsweek sees a Pelosi problem for Obama. Holly Bailey writes that various tensions have left Obama and House Speaker Nancy Pelosi "with a complicated relationship that hovers somewhere between friend and frenemy."

The Washington Post sees the central political battle as one over cost. Lori Montgomery writes: "As Congress this week begins reviewing Obama's request, Republicans are blasting the proposal as a historic and irresponsible enlargement of the federal bureaucracy that ultimately will force Obama to break his pledge to avoid a broad-based tax increase....

"Democratic congressional leaders say they expect to endorse Obama's agenda in April. But they warned that it will not be easy and predicted that a proposal to limit tax deductions taken by the wealthy for charitable giving, mortgage interest and other items may not survive."

So.

What would be Obama's most effective strategies when it comes to fighting -- and beating -- the Washington establishment? I'll have some thoughts about that tomorrow. In the meantime, I welcome yours, in comments.

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