Although understatement is an attractive quality in most lines of work, politics is different. Framing achievements so as to get timely bragging rights for them is part of the job, if you want to keep it. Since most politicians are only too eager to claim credit for any positive development, this isn’t usually an issue; indeed, some political scientists try to explain everything politicians do as driven by efforts to take credit and avoid blame. But then there’s Barack Obama, who as president has succeeded in avoiding credit for things he has accomplished and taking the blame for things his predecessor did. Therein lies a tale—and a lesson.
Obama’s biggest failures in the credit department are the subject of a new book by Michael Grunwald, The New New Deal: The Hidden Story of Change in the Obama Era. The tale Grunwald tells is about the 2009 stimulus bill, and it’s not hype to call the story “hidden”—though the crucial details, like the clues in a good mystery, have been hidden in plain sight.
The stimulus program—the American Recovery and Reinvestment Act—is mixed up in the public memory with the bank bailout that George W. Bush signed into law. The Recovery Act’s reputation hasn’t suffered, however, just because of hazy recollections or unfair media. The legislation was more than stimulus; it was a massive public-investment program whose significance was lost from the start.
As to the short-term stimulus—yes, even at $831 billion, it was too small to pump up an economy that was in free fall as 2009 began. But, contrary to the public consensus that the stimulus utterly failed, the consensus of economic analysts is that it created or saved between two million and three million jobs compared to the number that would have been lost without it. The White House mistakenly believed that it could go back to Congress for more if the initial package proved too little, but it never got a second installment.
The original New Deal conspicuously built bridges and dams, put people to work, and put money in their pockets. But because infrastructure projects don’t get money into circulation fast enough, the administration needed to include other measures. In one area after another, though, it chose policies that the public would hardly notice.
There’s no better illustration than the decision to dribble out tax cuts through reduced federal withholding, instead of doing what George W. Bush had done—send out big rebate checks with a letter from the president. Reduced withholding had a rationale; people are more likely to save a lump-sum check, and the aim was to get them to spend it. Unobtrusiveness, however, had huge political costs; Grunwald notes that “fewer than 10 percent of [Americans] were aware of the largest middle-class tax cut in a generation”—in fact, many think Obama raised their taxes.
Similarly, the Recovery Act’s $165 billion in aid to the states to minimize public-employee layoffs was an effective way to prevent unemployment from rising. But it was also nearly invisible; many Republican governors got the political credit. Providing $25 billion for retrofitting buildings to improve energy efficiency was also rational policy but low in visibility. The Recovery Act provided a huge amount of long-range investment in energy—“It was the biggest energy bill ever,” Grunwald writes—but that might as well be top secret. Obama wanted the equivalent of a Hoover Dam but never got one; he imagined a “smart grid” or high-speed rail as a marquee project, only to learn that state and local laws made quick progress impossible.
The 2010 Affordable Care Act (ACA) is another story of a policy that failed to get Obama timely credit. Health-care reforms don’t intrinsically take four years to carry out (Medicare took one year). The delay in expanding coverage until 2014 mainly reflected an effort to minimize immediate budgetary impact; the White House made no effort even to support a “rolling start” to the program, which had only a modest cost. Under that provision, half a dozen states might have already carried out the program, dramatically changing public opinion and the facts on the ground.
As a result of the ACA’s limit on the share of the premium dollar that can go for profits and administration, insurers this year are sending out more than $1 billion in rebates. But most of that money is going through employers, and most people who benefit will have no idea they benefited because of “Obamacare.”
Obama also gets no credit for rescuing the auto companies and their suppliers, an effort that like the stimulus is confused in the public memory with the bank rescue and stigmatized as a “bailout.”
Failing to get credit isn’t just an electoral problem for Obama. The Recovery Act has left Keynesian measures in bad odor, and the ACA has left health-care reform vulnerable to repeal. Get the politics wrong, and you damage sensible policy. We may need a long time to recover from that, too.