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Grading Obama on Domestic Policy

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It's been nine months since Barack Obama was sworn in as the 44th President of the United States. Time enough to grade the job he's done and consider what we can expect over the next few months.

A January 22nd poll asked Americans what the President's priorities should be. The top ten were the economy, jobs, terrorism, social security, education, energy, Medicare, deficit reduction, and health insurance. In the most recent comparable poll America's top ten problems were the economy, healthcare, jobs, dissatisfaction with government, Federal deficit, lack of money, Iraq, Ethics, Afghanistan, and Wars in general.

As we would have expected, over the past nine months, the economy has been Obama's highest priority. The results have been mixed. In February, Congress passed the President's stimulus package, an action that many credit with stopping America's slide into depression. No big banks have failed and the stock market has rallied. However the average US family continues to struggle. In January the unemployment rate was 7.6 percent (up from 4.9 percent a year earlier); now it's 9.8 percent.

While Wall Street believes the recession is over, US workers are not convinced. In January consumer confidence was at 37.7 percent; at the end of September it was 53.1 percent. On January 20th, 34 percent of poll respondents saw America headed in the right direction. Today that number has slightly increased to 40 percent.

It's probably fair to give Obama a B on the economy. Recent poll results support that assessment, although over the last nine months the number of Americans who do not approve of the President's handling of the economy has increased.

For at least the next nine months, the economy will continue to be America's number one problem. So far we've seen a jobless recovery and many believe a second stimulus package is necessary. It's unlikely this will happen until early in 2010.

Polls indicate Americans are angry at Wall Street "executives who have received large paydays while their companies teetered on the brink of collapse and needed government money to survive." The White House has proposed new financial regulations and this legislation is slowly wending its way through Congress, being fought tooth and nail by lobbyists for the financial services industry. There will eventually be a reform bill but it may not happen this year. Obama's grade is incomplete.

The jury is still out on healthcare, which has commanded a huge amount of attention over the past six months. It appears that Congress will pass major healthcare reform by the end of the year, but the devil will be in the details. Recent polls indicate that Obama gets mixed reviews on healthcare but this assessment will change after he signs the final bill. Another Incomplete.

As the battle over healthcare reform has stretched out, Americans have become more concerned about the Federal deficit and their level of dissatisfaction with government, in general, has grown. Republicans have scored points with their "big government is not the answer" and "we shouldn't increase the deficit" refrains. This mentality will slow down work on a second stimulus package.

Lost in the "sturm and drung" of the current Congressional session has been the much needed climate and energy legislation. In June the House passed a cap and trade bill that has since languished in the Senate. On October 11th, Senators Graham and Kerry wrote a New York Times Op-Ed outlining a bi-partisan approach that would produce a bill this year. Again, Obama's grade is Incomplete.

It's impossible to separarate Obamas's performance as President from his standing as head of the Democratic Party. Regardless of his performance on particular domestic issues, voters form a visceral general impression of their new President. Obama's recent approval ratings have been in the 50-57 percent positive range. Not surprising considering the scope of America's economic problems and the media battle that has been waged over healthcare. Nonetheless, Obama's level of support is roughly at the 53 percent level it was at when he won the presidential election in November.

When healthcare reform is enacted, followed by comprehensive reform of the financial services industry, the President's ratings will improve as should those of Democrats, in general. However, going into 2010 the big problem will be the jobless economy. Next year, Obama will have to make this his number one priority, probably use his political capital to ram a second stimulus bill through Congress.

As we head into a year of congressional political campaigns, the question is whether President Obama will help or hinder Democratic candidates. The Cook Political Report indicates that the political tide has turned against Democrats. In the Senate they run the risk of losing their 60-vote plurality - and possibly the seat of Majority Leader Reid. In the House they run the risk of losing 10-20 seats.

In the coming nine months, Obama has to get more done - turn his incompletes into passing grades - in order to improve his ratings and help the Democratic Party retain control of Congress.