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It's Show Time for Obama

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One of the most coyly ambiguous lines in President Obama's Inaugural Address was his pledge to "end to the petty grievances and false promises, the recriminations and worn-out dogmas that for far too long have strangled our politics."

That sounds high-minded, but you can read the promise two ways. Some heard it as a reproach to Republican ideology and to President Bush, who was seated nearby. Others heard it the latest reiteration of Obama's desire to move beyond dogma per se and to achieve a new synthesis.

We will soon learn which it was. Obama, the president who would be post-ideological, is at last having his first encounters with the realities of polarized politics. Exhibit A is the stimulus package.

Obama has been more than generous in offering the Republicans far more tax-cutting as part of the recovery program than sound policy warrants. Will they reciprocate and support the rest of the package?

At Obama's meeting last Friday with Congressional Republican and Democratic leaders, Republican Congressman Eric Cantor of Virginia was making the case that more tax cuts would be more stimulative than public spending. Obama replied in a jocular way according to those present, that the issue had been settled by the election, and "I won."

Nothing post-ideological about that assertion.

More important, perhaps, was Senate Republican Leader Mitch McConnell's reported statement that Senate Republicans would not filibuster against the stimulus package. But this may have been short-lived. In the official Republican response to the President's remarks Saturday urging passage of the plan, House Republican leader John Boehner scoffed that the plan would "spend a whopping $275,000 in taxpayer dollars for every new job it aims to create, saddling each and every household with $6,700 in additional debt."

On the Sunday talk shows, Republicans turned up the rhetoric. Even John McCain, who Obama went out of his way to court, called for more tax cuts and indicated he would vote no unless they were included.

The bill can squeak through without Republican votes, assuming no filibuster. But a more difficult balancing act may come within the Democratic Caucus. Obama needs not only some Republican backing or at least a Republican agreement not to filibuster. He also needs the support of the fiscally conservative Blue Dog Democrats. Their mantra has been that deficits are far too large. They were calling for spending cuts (and some tax increases) back when the deficit was less than 3 percent of GDP.

Even without Obama's proposed $820 billion recovery program, the Congressional Budget Office's latest budget projection shows a deficit of $1.2 trillion this year, or 8.3 percent of GDP. The sharp increase in the deficit is the result of the recession, which reduces economic activity and hence tax receipts. With enactment of the stimulus, the deficit temporarily rises to over 10 percent of GDP--the biggest deficit since World War II.

Most of the Blue Dogs, who include House Budget Committee Chairman John Spratt of South Carolina, acknowledge the need for a temporary increase in public spending. Spratt's opposite number, Senate Budget Chairman Kent Conrad (D-ND), warned at a recent hearing that the United States was headed for a fiscal catastrophe. Conrad acknowledged "the need to have an economic recovery package that will add to deficits and debt in the short-term." But he went on to sound the alarm about the "unsustainability of our current fiscal condition."

This also suggests an ideological division that will be hard to paper over. After four decades of bipartisan assaults on government, many progressive Democrats (this writer included) hope to use the stimulus as a down-payment on an expansion of government services such as affordable housing and early childhood education that have been chronically under-funded, as well as long term investments in green energy and smart infrastructure.

But the 49-member Blue Dog Coalition in the House and Senate fiscal conservatives such as Conrad see the stimulus as a one-shot. They want sharp spending cuts as soon as the immediate crisis is past, to pay for the fiscal sin of a temporary deficit hike.

If you look at the details of the Obama recovery plan, however, it includes a lot of outlays that don't look like one-shots: laying more than 3,000 miles of electric transmission lines; installing 40 million "smart" utility meters to help reduce energy use; weatherizing 2 million homes and most federal buildings. Among the other infrastructure investments are improving security at 90 major ports and modernizing the nation's water system. These needs and others like them don't end after two years.

Obama said Saturday in his first radio and video address, "This is not just a short-term program to boost employment. It's one that will invest in our most important priorities -- like energy and education, health care and a new infrastructure -- that are necessary to keep us strong and competitive in the 21st century."

Sounds good to me, but he will face ideological qualms from the fiscal conservatives within his own party, as well as from most Republicans. So the bipartisan honeymoon is unlikely to last, and I'd say, good riddance. Obama's real challenge is to mobilize public opinion--not just to win general approval ratings but to make it very hard politically for anyone in either party to oppose his recovery program or to demand crippling budget cuts down the line as the quid pro quo. That's what leadership is all about.

It's show time. Call me out of date and ideological, but it's reassuring when President Obama reminds himself and his opponents that "I won."

Robert Kuttner is co-editor of The American Prospect. His best-selling book is "Obama's Challenge: America's Economic Crisis and the Power of a Transformative Presidency."