Believer: My Forty Years in Politics (46 page)

I liked Eric, but he was a lawyer and not a politician, so I asked for a meeting at which I suggested adding someone to his communications staff who could help advise him on these nuances and protect him from unnecessary errors that might splash back on us. Holder listened politely, but soon was complaining to others that I was trying “to stack the Justice Department with political people.”

I was furious. During the Bush administration, Karl Rove had come under justifiable fire and congressional scrutiny for his involvement in the highly political hirings and firings of U.S. attorneys. I was determined never to interfere at Justice in that fashion, and I never did. A few days later I cornered Holder after a White House meeting and let him know my strong feelings about his insinuation. The discussion, which began in an open corridor of the White House, became so heated that Valerie shooed us into a private office to finish it.

One great challenge of the White House is that while you are trying to affect policies that speak to the concerns of the American people, you rarely leave the building to meet those people. Working in the White House, a colleague once said, is like working in a submarine—and it’s hard to get a read on the pulse of America when you’re looking at the country through a periscope. I tried to remedy this by hosting a meeting every Wednesday night at my apartment with key White House communications players and my campaign strategic team. Benenson, Binder, and Grisolano would offer readouts of and insights into their research, and we would fill them in on the administration’s plans. These meetings became a lifeline that helped me keep in touch with the world beyond the White House gates.

That said, I can’t remember a time during my two years in the White House when I looked at my watch wondering when the day would end. Instead, I regularly found myself asking where the day had gone. I worked at the office well into the evenings, often catching a late dinner with a reporter, colleague, or member of Congress. When I arrived home, almost always after ten, I would spend an hour or two catching up on papers and news stories I had missed and reading materials for the next day. Some nights ended with late calls from the president, who’d want to chew over the events of the day. After a scant few hours’ sleep, the whole cycle would start all over again.

It was a relentless, bone-wearying, pressure-filled grind. However, after the initial shock to my system, I found it thoroughly addictive and engaging. In what other job could you deal with issues of war and peace, an economic crisis, pirates, pandemics, and natural disasters—sometimes all in one day? Where else could you have the opportunity every day to play a small role in history?

During those two years, we would pass more meaningful legislation than any new president had in half a century: a vast expansion of college aid for needy students; new consumer protections for credit card holders; a long-sought law tightening regulation of tobacco; the Lilly Ledbetter Fair Pay Act, strengthening the tools for women to fight for equal pay; and the abolition of the Don’t Ask, Don’t Tell law prohibiting gays from serving openly in the military. Obama would forge a breakthrough agreement with the auto industry for higher fuel efficiency standards and end a ban on potentially lifesaving stem cell research. Also, he would put two splendid women on the Supreme Court—including the first Hispanic, Sonia Sotomayor—making America’s highest court more reflective of the nation it serves.

For all that, though, three historic undertakings loomed so consequential and consuming that they would define not only my two years in the White House, but the Obama presidency.

T
HROUGHOUT
THE
LONG
CAMPAIGN
,
O
bama was preparing to assume office in a time of war while facing an ongoing terrorist threat.
W
e expected
that
.
N
ow we also faced a once-in-a-century economic disaster that would hover over us for years, through long, grinding days and short, sleepless nights.
O
bama had inspired a battered and disillusioned nation to believe that there were better days ahead.
Y
et there was no magic wand to wave to deal with this calamity; no easy or painless answers—just a series of necessary but unpopular choices.

To break the downward cycle and jolt the economy, we would have to fight for the massive emergency spending bill we had begun plotting back in Chicago in December. To keep capital flowing while the financial crisis deepened, we were forced to buttress some of the very bankers whose greedy schemes had brought down the economy. Also, within months of taking office, the president would have to decide whether to save the American auto industry from its own strategic mistakes or allow it—along with communities across the industrial Midwest—to collapse. All this would only add to the record deficits Obama has pledged to bring under control.

Bemoaning our dismal hand, I wondered out loud how it would have been to arrive at the White House in
good
times. Obama smiled. “Don’t kid yourself, brother,” he said. “If these had been good times, we wouldn’t be here!”

So we dug in, drawing down on the popular new president’s goodwill to try to resuscitate the rapidly failing economy, spending money we didn’t have and bailing out those who had helped inflict this catastrophe on the rest of us.

I knew that each of these decisions would rankle millions of Americans, neither rich nor poor, who already were deeply alienated in the modern-day economy. The explosion of technology coupled with globalization had lifted productivity and corporate profits to new heights and created lucrative opportunities for the highly educated. It also had cost millions of Americans good jobs and put downward pressure on wages. The Great Recession would only accelerate these trends. Many Americans were working harder to meet their responsibilities, and falling further behind. Now they watched in dismay as, all around them, the people and institutions that had failed to meet
their
responsibilities were being extended lifelines by the government.

Some of their ire was directed at the poor, who were the beneficiaries of modest public assistance. Increasingly, though, their anger was aimed at Wall Street and the folks at the top, who they felt had rigged the game in their favor to the detriment of the country. This wasn’t lost on Obama. It rankled him to ride to the rescue of high-flying financiers and oblivious auto executives. He had campaigned to reform the irresponsibility on Wall Street and in Washington, and had promised to tackle the Bush deficits. Yet with the economy crashing, the inescapable truth was that for President Obama to meet
his
responsibility, he would have to take steps that some who voted for him would view as an abrogation of those principles.

In doing so, Obama would come under withering criticism from all corners—from his supporters who yearned for heads to roll; from a financial community that felt it was above penalty or even rebuke; and from a united Republican opposition content to sit back and blame the new president for failing to promptly clean up an epic disaster that their policies had helped to create over many years. He was caricatured as fickle and feckless.

I was a witness to a different and truer picture. I saw the president make a series of politically toxic decisions to rescue the financial industry and the larger economy from a far more devastating crisis. I saw him reject seductive answers that had strong, populist appeal for fear of retarding recovery not just for Wall Street, but for the entire country. I saw him thinking past the crisis to how we would rebuild the economy, using the leverage of recovery funds to promote higher educational standards, new energy industries, and more efficient health care delivery. And, yes, I saw him take on powerful forces to promote fair, open, and transparent markets in which the interests of consumers and the economy would be protected.

I also saw him steer the country past a second Great Depression and on an undeniable path to recovery.

 • • • 

Larry Summers and the economic team believed it was essential for the government to move quickly with a stimulus plan, the bigger the better. The proposed package would include tax cuts for the middle class and the working poor, a basket of accelerated investment tax credits for business, aid to state and local governments, expanded food stamps and unemployment benefits, and funding for backlogged infrastructure projects to revive a moribund construction industry. True to Obama’s Chicago mandate, it also would include an array of investments in education, health care, and clean energy technology, which would spark activity in the short run but also plant seeds of longer-term progress and growth.

Obama and Biden would hit the road to promote the plan’s regional benefits and the 3.5 million jobs we said it would “save or create.” All of us who spoke for the new administration ran the gauntlet of TV talk shows to advocate for the rescue plan. Rahm worked the phones and shuttled back and forth across Pennsylvania Avenue and the Capitol Rotunda, bargaining, cajoling, and pleading to wrangle votes. This meant beating back Congress’s reflexive instinct to lard the bill with indefensible pet projects, and balancing the more progressive and expansive ambitions of House Democrats with the concerns of a handful of Senate moderates, Republican and Democrat, over massive new spending.

Still, to Americans alarmed by record deficits and suspicious of government’s motives and capabilities, the plan would be polarizing, sending Democrats to one corner and Republicans to another. By its very nature, the package, a potpourri of tax cuts, state aid, social spending, and infrastructure projects, created the image of the typical pork-lined Washington bazaar. To a cynical public, it looked less like “Change We Can Believe In” than “Dollars We Can’t Afford,” which was another way of saying business as usual. Also, it gave an early opening to Republican leaders looking for a wedge to peel away support from the popular new president.

More than any substantive position of the campaign, it was Obama’s pledge to end the bitter partisan wrangling in Washington that had drawn frustrated Americans to his side. Yet it quickly became clear that the Republicans in Congress would hardly greet us with flowers, chocolates, and a new spirit of cooperation. A week after taking office, Obama asked for a meeting with the House Republican Caucus to plead his case for the Recovery Act. Then, just before he left the White House to brief them, the Associated Press reported that Republican leaders were already urging their caucus to oppose the plan. The president was heading off to present his case to a kangaroo court. “This shit’s not on the level, is it?” he asked as he walked out the door.

The Recovery Act would pass the House without a single Republican vote. In the Senate, three Republicans supported the emergency measure, enabling its passage. One of those Republicans, Arlen Specter of Pennsylvania, left the party a few months later, having become a pariah in his caucus for breaking ranks.

Could we have done more to secure Republican support? There is no doubt that in our haste to pass the plan, Rahm and our team worked more closely with the Democratic majorities in Congress. However, the near-unanimous Republican opposition was not in a fit of pique about being insufficiently consulted. Their opposition to the plan was a political strategy, hatched right from the start (one that would become a running story line throughout the Obama years). Mitch McConnell, the Senate Republican leader, explained as much in a newspaper interview a year later. “It was absolutely critical that everybody be together because if the proponents of the bill were able to say it was bipartisan, it tended to convey to the public that this is O.K., they must have figured it out,” said McConnell, boasting of the party discipline he had enforced.

We naïvely assumed that in a time of national emergency, Obama might find governing partners across the aisle to meet the crisis. After all, only a few months earlier, when Bush and Paulson were begging for bipartisan support to buttress the financial system, Obama and the Democratic leaders in Congress had answered their call. Now we were facing monolithic Republican opposition, and it was galling. Maybe this was what Hillary was talking about when she chided us during the campaign for “raising false hopes.”

By any fair measure, the Recovery Act would make a palpable and positive difference. Within months, the economy would be growing again, the hemorrhaging of jobs ended, and hiring resumed—albeit at a maddeningly slow and uneven pace. Whatever the macroeconomic indicators, though, trillions of dollars in wealth had been washed away in the storm, and Americans were not feeling that progress in their own lives. Having sat out the effort, the Republicans seized on the public’s sour mood. They would depict the Recovery Act as an emblem of profligacy—proof that Obama, who had run for president pledging fiscal responsibility, was just another spendthrift, big-government liberal. “Where are the jobs?” became the irksome mantra of the Republicans, though more than a few of them eagerly showed up smiling for the cameras at ribbon cuttings for Recovery Act projects in their districts. “These guys are shameless!” Obama said, flabbergasted after reading one such story.

As the months went by, the Washington media, wont to filter everything through the prism of politics, began to question the wisdom and efficacy of the Recovery Act. Even after its positive effects were becoming evident, one of Washington’s most respected journalists parroted this ludicrous notion that had emerged from the GOP playbook.

“What are you going to do about the Recovery Act?” she asked me.

“What do you mean?”

“It’s a failure.”

“A failure?” I asked, incredulously. “Why?”

“Well, only thirty-eight percent of voters support it!”

It was a parable of life in our nation’s capital, where success is measured not by what you accomplish, but how voters
feel
about it at any given moment. Breathless and ubiquitous cable TV coverage and social media have created a permanent campaign mentality that treats every day in Washington as Election Day. The industry I helped build is now ready to mobilize at a moment’s notice, with ads, e-mails, and all the tools at its disposal to make incumbents pay for impolitic decisions, even when they are a courageous response to an urgent national need. For Obama, who draws a tight distinction between the demands of campaigning and the responsibilities of governing, the permanent campaign mode was a source of constant frustration.

“You know, I love this job,” he said, as we were waiting for a town hall meeting in Los Angeles during the first months, when he was wrestling with the economic crisis. “I love diving into problems. But dealing with some of the people you have to deal with and the whole cable thing wears you out. I’ll be honest—four years of this might be enough. I won’t be run out. But if we can turn the economy around and get some things like health care done, I could see walking away from it.”

I knew it was the weariness of the moment talking. It was hard to imagine this highly committed and intensely competitive man “walking away.” A few weeks earlier, Obama had told Matt Lauer of NBC that his failure to turn the economy around within three years would make his presidency a “one-term proposition.” Those words would come back to haunt him. Progress would come, but painfully slowly. Many corporations responded to the recession by “streamlining” their operations, meaning the permanent elimination of jobs. Even when the economy began to grow again, wary executives hoarded their cash rather than investing in new employees.

I had spent much of my life studying polls, and continued to devour them every day in the White House. Now I became a voracious reader of other numbers: the weekly unemployment claims, durable goods orders, manufacturing reports, the University of Michigan Consumer Sentiment Index, and an array of other arcane economic statistics and indexes that I scoured for any hint of good news. Of course, we all approached the monthly jobs report with a combination of anticipation and dread. Pummeled with a constant stream of bad news, you could leave yourself susceptible at times to unwarranted optimism. When Treasury officials bragged about the success of one of their early initiatives, Obama had a tart reply: “Let me say, you guys did a great job. Take a moment, give yourself a pat on the back, and figure out a way to put eight-point-four million people back to work!”

 • • • 

In early planning for the administration, I had suggested that we add a daily briefing on the economy to the president’s schedule, similar to the traditional national security briefing he would receive each day. Led by Larry Summers, these became the hub for rigorous strategic discussions.

Larry had a reputation for intellectual superiority, which didn’t bother me, because he actually was as smart as he thought. While his sometimes imperious style was a source of tension within the president’s economic team, I appreciated Larry, even when we disagreed, which was not infrequently. Larry playfully dubbed Rahm and me Tammany Hall, for injecting real-life political considerations into these economic discussions. He also worked to understand those considerations. His broad sweep and mastery of economics made him an indispensable asset to the president, though Obama, never intellectually overmatched, occasionally forced Larry to pause and utter some sentences rarely heard from him before, such as “I never thought of that!” or “I’ll have to get back to you.”

Even more interesting was the dynamic between Summers and Geithner, his onetime protégé. For the most part, they agreed on policy matters and worked together effectively, but there was no consensus between them on one of the most vital and vexing questions we faced: how to stabilize the banks so they would start lending again.