Saturday, September 4, 2010

America: Divided they stand

By Edward Luce

Published: September 3 2010 20:01 | Last updated: September 3 2010 20:01 (Financial Times)

Some of the nearly 100,000 who attended a Tea Party rally on the steps of the Lincoln Memoiral in Washington on August 28

At a June event in Ohio to highlight job creation, President Barack Obama proclaimed that America was in the midst of a “recovery summer”. Although it arguably elevated hope above experience, the phrase caught on among Democrats. Mr Obama was referring to the economy and the employment market. But three disappointing jobs reports later, it is the Republicans who have staged the dramatic recovery.

With just eight weeks left before midterm elections to Congress, polls are predicting a dramatic shift in power in Washington on November 2, with most forecasting a Republican takeover of the House of Representatives and some even a change of control in the Senate.

Barring an “October surprise” that alters the political climate – such as the 1962 Cuban missile crisis, when John F. Kennedy’s deft handling of the Soviet threat curbed Democratic losses the following month – most pollsters express strong confidence in their forecasts.

“If anything we have been conservative in estimating the probable Republican gains,” says Larry Sabato, who runs the University of Virginia’s Crystal Ball forecasting unit. He predicts the Republicans will gain 47 seats. The Democrats currently have a majority of 39. “The Democrats’ self-proclaimed ‘recovery summer’ has become a term of derision and to most voters, fair or not, it seems that President Obama has overpromised and underdelivered.”

A change of congressional control would bring to a juddering halt Mr Obama’s 18-month spree of reformist change, which began in January 2009 with a $787bn (€612bn, £510bn) fiscal stimulus and continued this year with the $1,000bn healthcare reform and a re-regulation of Wall Street.

Indeed, all the polls indicate it is Mr Obama’s activist impulse that has brought him to the brink of this potentially disastrous setback. Unlike Bill Clinton, who was undone in the 1994 midterms by his failure to pass an unpopular healthcare bill, Mr Obama’s growing unpopularity partly results from his very success on that front. “This is what change looks like,” he said on signing into law the historic bill.

Yet Americans have yet to feel the benefits. This week the Kaiser Foundation, which monitors the healthcare sector, said that the average individual’s healthcare premium had risen by 14 per cent since 2009 to $4,000 a year. Mr Obama promised on the campaign trail to reduce healthcare costs.

So the Democrats head into the formal campaign, which starts on Tuesday after the Labor Day holiday, talking about everything other than healthcare – a telling omission given that it was the president’s signature reform. In contrast, a Republican base straining at the leash to take a bite at Mr Obama has drawn sustenance from his often unsightly effort to push healthcare through Congress.

“There is no doubt that the first thing a Republican majority would do if it took the House is to repeal healthcare,” says Vin Weber, a key figure in the 1994 Republican victory and still a sought-after adviser. “No doubt a repeal of healthcare would be vetoed by President Obama, even if it got through the Senate. But it shows you what a central role it has played in motivating the base.”

Such strength of feeling explains why pollsters are so confident in their predictions. Turnout in midterm elections tends to be well under 50 per cent, which means the outcome is usually determined by whichever party can garner the most enthusiasm among its supporters. Polls show the “enthusiasm gap” at record levels. Most of the groups that swept Mr Obama to power in 2008 on a robust 63 per cent turnout, including the young and minorities, appear to be apathetic or disillusioned.

Those who voted against him, including pensioners worried that healthcare changes might eat into their existing benefits, and a large percentage of white blue-collar males who believe the president has pursued an elitist agenda at the expense of focusing on jobs, are fired up. Last weekend the anti-government Tea Party movement attracted close to 100,000 to a Washington rally.

The rally – led by Glenn Beck, a hard-right talk show host who alleges Mr Obama has “contempt for the scriptures” – focused on restoring “honour” and “God” to American public life. The Democrats, who also look likely to lose control of governorships in traditionally safe states such as Michigan and Pennsylvania, seem helpless against this wave of anger.

Even moderate Republicans, who were once attracted to Mr Obama, appear to share it. “I have to say I am disappointed by President Obama – we expected something very different,” says Ken Duberstein, the White House chief of staff to Ronald Reagan in the 1980s who endorsed Mr Obama in the 2008 election. “He promised to transcend the ideological divides. But more government appears to be his solution to almost every problem.”

Such is the weight of the forecasts that attention is already turning to how Mr Obama would handle divided government. Again, the closest parallel is 1994 when Newt Gingrich’s “new model” Republicans seized control of Congress and put Mr Clinton’s presidency into cold storage. But Mr Gingrich, whose party had been in the minority for the previous 40 years, quickly overreached.

In a stand-off with Mr Clinton over the budget, Mr Gingrich deprived the government of day-to-day funding. The public blamed the Republicans for the resulting shutdown. Mr Clinton, who had been lamely protesting that “the president is still relevant”, regained the initiative and managed to win re-election a year later.

Could the Republicans overreach again? Given the strength of the Tea Party, which has unseated several incumbent Republicans simply for having voted for spending bills, many of the more thoughtful Republicans are worried this could happen.

Unlike Mr Gingrich, who was the undisputed master of his party, John Boehner, who would become speaker if the Republicans won the House, is not the principal orchestrator of the forces from below.

Many of the likely new intake of Tea Party candidates, such as Rand Paul in the Senate from Kentucky, have pledged to abolish big government. “It will be important for Republicans to remember that this would be a rejection of the Democrats rather than an endorsement of the Republicans,” says Tom Davies, who was part of Mr Gingrich’s 1994 intake. “The public wants to replace President Obama’s blank cheque with a check on Mr Obama. They want to force the two parties to sit in the same room and work together.”

History suggests divided government is what most Americans prefer. For 38 of the past 60 years, presidents have had to work with legislatures controlled by the opposing party. But this time feels different. “I think it is safe to say this would be the most ideologically divided Washington we have seen in modern times,” says Mr Weber. Few disagree.

“Gingrich was ideological but I don’t recall Republicans cheering people who promised to secede from the union,” says Jim Lindsay at the Council on Foreign Relations, referring to a recent Texan Republican rallying cry to break away from the “socialist” US. “There is an extremist sentiment in the country that makes the prospect of divided government much more difficult to predict” in its impact, he adds.

Others worry about Mr Obama’s appetite for working with ideological opponents, even though he swept to office promising to move beyond politics as usual. On this, much like Mr Clinton in his first two years, he has clearly failed. Unlike Mr Clinton, though, who had many years of experience governing the largely Republican state of Arkansas, Mr Obama has no record of working closely with Republicans, let alone Republicans in the Tea Party mould.

Nor does he appear to relish the challenge. “There was something about Clinton that he could walk into a room and talk to the janitor and the chief executive just as easily – it didn’t make any difference which,” says Mr Weber. “He loved dealing with people and he got a huge kick out of playing the tactical games of politics. From what I can tell, Obama doesn’t love being president. He doesn’t eat, sleep and breathe politics in the way Clinton did.”

In contrast to 1994, when America was still enjoying its post-cold war unipolar moment and China was only just starting to emerge as a powerhouse, the stakes now are far higher. Whichever party prevails in November, the next Congress will immediately be consumed by battles over the deficit, spending and economic growth. If gridlock ensues, it could be the bond markets that dictate events.

The Republicans have promised to solve America’s debt problem by cutting taxes and spending. Democrats would prefer to do the opposite. The most likely short-term prospect is gridlock. “There is a history of Republicans coming to power expecting to abolish big government just like Democrats come in expecting to build a high-speed rail network,” says Michael Lind, a political scientist. “Neither ever happens. It is just a question of how long it takes for them to sober up.”

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