The era of post-partisanship lasted exactly a week. In an attempt to appease Republicans, House Democrats included in the stimulus bill more tax business cuts than were warranted and even tossed overboard funding for family planning. And they were rewarded with not a single Republican House vote.
President Obama, meanwhile, has started doing what a strong leader needs to do. He is rallying public opinion. His remarks calling the Wall Street bonuses "shameful" are a good start.
Democrats are also upping the pressure on Republicans back home, beginning with a plan that my sources tell me will release estimates on how many jobs the recovery package will save or create, district by district. And some Senate Democrats are making noises about getting rid of the tax cuts that were added by the House solely to get GOP votes. TV ads are already airing urging legislators to support the president's recovery program.
In principle, the Democrats need 60 votes to block a filibuster. But it's not even clear that the Senate Republicans will mount a filibuster. The House Republican Caucus has always maintained far more unity than the Senate, and it's hard to imagine moderates such as Sens. Olympia Snowe and Susan Collins of Maine supporting a filibuster.
Midwestern Republican senators such as George Voinovich of badly hit Ohio would have a hard time justifying a filibuster, too. And Charles Grassley of Iowa, the ranking Republican on the Senate Finance Committee, who enjoys a close relationship with Chairman Max Baucus of Montana, has an interest in getting this bill passed. Grassley succeeded in getting the Finance Committee to add a tax-relief provision for upper-middle-class taxpayers who would otherwise be subject to the higher rates of the alternative minimum tax.
On Thursday, the children's health bill passed the Senate by a margin of 66 to 32, with several Republicans crossing the aisle. This is the right kind of bipartisanship for the Obama era -- a Democrat-led initiative that is too necessary and too popular for many Republicans to resist, and a reminder that Senate Republicans do not vote in ideological lockstep.
In the end, the recovery plan is likely to pass the Senate by a few votes next week. And I would wager that when it comes back to the House for final passage, the Republican unity will fracture. Having cast a unity vote against the initial bill, several politically marginal Republicans in hard-hit districts may well vote for the final bill. In an indication of Republican thinking, Vin Weber, a former GOP congressman and respected Republican strategist, was quoted in The New York Times as saying that the Republican unity on the first House vote was no political risk because Republicans believed that the bill would ultimately become law.
During the next week, there will be mounting pressure from mayors, school officials, and small businesses -- who are hurting just as much in red congressional districts as in blue ones. If President Obama has the political gifts of leadership that his admirers have long discerned, he will adroitly increase that pressure.
This is one of those defining moments that establishes a new president as a strong leader or a feeble one. If Obama falters, Republicans will scent blood in the water and will oppose everything he ventures between now and the 2010 midterm, no matter how conciliatory he tries to be. If he prevails on this bill and succeeds not just in keeping the public's good wishes but in mobilizing the public and the Congress, he will be 10-feet tall and harder to stonewall.
There is one distressing element in the politics of the recovery bill, however, and it comes from the fiscally conservative wing of the president's own party. As our colleague Ezra Klein pointed out in a recent piece for the Prospect, Sen. Baucus could well be the Obama's key ally in getting health reform--or he could revert to "Bad Max," the Democratic enabler of conservative tax policy.
For Baucus watchers, the early signs are not encouraging. In the Senate Finance Committee markup of the recovery bill's tax provisions, Baucus succeeded in inserting a provision allowing corporations to defer taxes when they buy back their own debt at discount. Another of his latest proposals, and perhaps the price of his support for the recovery package, is a freeze in the estate tax at 2009 rates, which means that only astronomically wealthy people pay any tax, and revenues will be lost from the very highest brackets. Just one-quarter of 1 percent of estates would pay any tax at all.
According to an analysis of the Baucus plan by the Center on Budget and Policy Priorities, the budget cost would be $609 billion over a decade, and in a climate of concern over rising deficits, the costs would invariably be made up by other taxpayers, in either higher taxes for everyone or reduced program outlays.
Even more alarming is the pressure from Senate deficit hawks, such as Baucus and Senate Budget Committee Chairman Kent Conrad of North Dakota, for a fiscal deal whereby their price for supporting large temporary increases in the deficit is serious cutting of Social and Security and Medicare a few years down the road. This tacit deal was the reason for Obama's announcement in an interview with editors of The Washington Post on Jan. 15 that he could convene a fiscal-responsibility summit at the White House some time in February, with deficit hawks among featured presenters.
In an economic collapse caused by market-fundamentalist ideology, Medicare and Social Security are the heart of America's threadbare safety net. People at or near retirement age whose 401(k) assets have been decimated by the market crash are more reliant on Social Security than ever. Their depleted income also leaves them far less financially able to supplement Medicare with out of pocket health payments. It would be ironic indeed if the price of a stimulus package to limit the damage of market fundamentalism would be a long-sought goal of free-market zealots -- the shackling of social insurance.
The cure for Medicare's cost inflation is comprehensive health reform, not a singling out of Medicare for the budget ax. And since Social Security is funded by taxes on wages, a restoration of wage growth is the ultimate cure for Social Security's projected long-term shortfall, which is minimal in any case.
So Obama faces pressure from multiple fronts to lead, and to lead as a progressive. So far, his trial by fire in the first days of his administration is tempering him into just that kind of leader. But in the coming weeks, there will be huge pressures to capitulate to expediency. Stay tuned.
