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The Next New Deal


En route to New Orleans.  

But Obama has no inbuilt animosity toward the congressional leadership. Sure, he vowed to transform Washington, but he did not run against it. He is surrounded by people—Emanuel, Podesta, former Tom Daschle aide Pete Rouse, and Daschle himself, who stands a reasonable chance of being Obama’s White House chief of staff—steeped in the legislative culture and masters of the legislative arena.

Not that dealing with a pair of institutions led by Nancy Pelosi and Harry Reid will be any kind of picnic. “They’re incredibly weak leaders running a Congress with 12 percent approval ratings,” one Democratic think-tank maven says. “They’re not people with much of a record of, you know, actually getting things done.” Making matters worse, Obama will be hounded constantly by the old-school liberal interest groups, with all their bottled-up desires and demands. The unions, the health-care groups, the teachers, and so on: Everyone will have their hand out.

Yet the very feebleness of Reid and Pelosi may work to Obama’s advantage; they are much more likely to see their fates as bound up with his than Tom Foley and George Mitchell ever did with Clinton’s. Obama’s race, in a funny way, may make him less vulnerable to mau-mauing by the left. And the unconventional way he ran for office, the whole bottom-up movement thing, may grant him a degree of independence unique in modern history. “Personally, I think the depth of the Obama realignment is being underestimated,” says the Republican media savant Stuart Stevens, who helped elect Bush twice. “They have basically invented their own party that is compatible with the Democratic Party but is bigger than the Democratic Party. Their e-mail list is more powerful than the DNC or RNC. In essence, Obama would be elected as an Independent with Democratic backing—like Bernie Sanders on steroids.”

Inside betting is for Larry Summers at Treasury. “They’re gonna w ant somebody who knows the building,” says an ex–Clinton aide.

At the same time, whereas Clinton had to deal with a strong Republican adversary in Bob Dole and an ascendant one in Newt Gingrich, Obama will be facing off against an opposition party demolished in number, ideologically inchoate, rudderless and basically leaderless in the House and the Senate. “The Republicans,” says the think-tank guy, “may very well be politically and intellectually decimated for ten years after this.”

Which brings us back to the Reagan precedent and why Podesta and his team are using it as the preferred exemplar for Obama. The collapse of institutional conservatism that is about to unfold—that is, self-evidently, already unfolding—creates an opportunity not unlike the one that Dutch faced in 1980 to fashion a functional, and not merely theoretical, alternative to New Deal liberalism. How Reagan and his adjutants, notably his budget director, David Stockman, did that was by crafting a detailed package of tax and budget cuts and presenting it almost immediately to the new Congress in February 1981. Thus was born the Reagan revolution, and the rest, as they say, is history. That Obama plans to do something similar is already abundantly clear—the question is just what his revolution might turn out to look like.

Emanuel doesn’t hesitate when I put the question to him. And his answer is one to which attention should be paid for reasons beyond the obvious. Emanuel is more than one of the shrewdest, savviest, toughest Democratic pols of his generation. He is a close friend and confidant of his party’s nominee and certain to be a pivotal player in putting meat on the bones of Obama’s campaign mantra of change, change, change. Obama’s chief strategist, David Axelrod, plays an identical role for Emanuel, whose congressional campaigns he has engineered and whose maneuvers in the House he has often guided from afar. Rarely does a day pass by in which the two men do not speak. The three-way mind-meld is nearly total.

“My view is that we gotta be the party of reform,” Emanuel begins when I reach him on his cell phone. “There are four reforms. There’s financial-regulatory reform, tax reform, health-care reform, and energy. Regulatory will kinda come down the chute fast. Tax reform will take a little longer, because it’s not until 2010 that Bush’s tax cuts expire. Energy, you can do some things immediately. And with health care, you’ve got the children’s health insurance as the first piece of a series of things you gotta do.”

Emanuel’s reform agenda is helpful because it’s clarifying—in terms of timing, in terms of priorities, and in terms of suggesting where Obama’s plans and the appetites (and political tolerances) of congressional Democrats intersect. In the early phases of the nomination contest, Obama was pilloried, and fairly, for a maddening vagueness on policy, for being long on inspiration but worryingly short on specificity. But over time, Obama has developed a litany of proposals laundry-listy enough to make Hillary Clinton proud—and pricey enough to have deficit hawks screeching at the moon. He’s pledged $60 billion in infrastructure spending, $80 billion for middle-class tax cuts, $150 billion for a green energy/jobs program, along with a raft of tax credits for college tuition, child care, clean cars, and, most recently, small businesses.


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