POLITICS
01/30/2009 05:12 am ET Updated May 25, 2011

Stage Set For Obama To Exercise Immense Power Over Domestic Policy

The economic crisis in combination with the staffing of the White House have set the stage for Barack Obama to acquire as much or more power over domestic policy as any president in American history - with key policy-makers firmly entrenched in the White House and the prospect of spending well over an unprecedented $1 trillion in "new" money during his first term in office.

The path to strengthened presidential prerogative appears clear, assuming that the economic or national security situation does not snowball out of control.

The president-elect has not only created new positions within the White House to oversee health, energy and environmental policy, but he has staffed these and other posts with men and women accustomed to the exercise of authority and familiar with the ways of Washington - appointees who are likely to dominate their counterparts in the Cabinet. "Under Obama, Cabinet members won't make policy, they'll implement it," one top operative in the Clinton White House noted with some admiration for way the new administration is being organized.

These top White House aides include Larry Summers, former Treasury Secretary, as chief White House economic adviser; former Senate Majority Leader Thomas Daschle, who will serve in dual roles as Secretary of Health and Human Services and top White House health adviser; and Carol M. Browner, former head of the Environmental Protection Agency, who will advise the president on energy and climate change.

In other words, by the standards of Washington, there will be a network of men and women in the White House and meeting daily with the president who are more likely to set economic, energy, health and environmental policy than Treasury Secretary Timothy F. Geithner; Energy Secretary Steven Chu; or EPA Administrator Lisa Jackson. Daschle with be in the unique position of holding a key Cabinet post while serving as a White House principal.

These steps represent a significant consolidation of policy-making muscle in the White House to the detriment of Cabinet-based governance. But the importance of this arrangement pales in comparison to the authority that has already begun to flow to the White House as a result of the financial collapse and the threatened bankruptcy of major industries.

Even with a sitting Republican president who draws record unfavorable ratings a Democratic-controlled Congress has effectively given the Bush administration a free hand in distributing $700 billion in TARP (Troubled Asset Relief Program) funds to pull the economy out of its nosedive. And after Congress rejected granting some of these emergency funds to the automobile industry, the administration unilaterally put $17.4 billion of them into a short-term auto rescue program, plus an addition $5 billion for GMAC, the automobile financing company jointly owned by General Motors and Cerberus Capital Management, the private equity firm that owns Chrysler - with only murmurs of complaint from Congress.

Bush's seizing of the reins in the absence of Congressional action stunned some conservatives. "If the elected voice of the American people, their Congress, votes down an auto bailout, no problem: The White House just overrides them," Republican media specialist Alex Castellanos told the Huffington Post. "If Republicans are concentrating power in Washington and in the White House, surely Democrats must go even further. George Bush's legacy may include this: He has resuscitated the old decaying industrial-age wing of the Democratic Party and left it with Nixon-like White House power."

Conversely, David Brady, Stanford political scientist and deputy director of the Hoover Institution, was far less critical: "Obama, given the crisis, wants to centralize economic strategy in the White House. It is a reasonable thing to try to do, given the promises made. Liberals should live with it. When you want the government to be all things - economic, defense, security blanket and, in general, the great risk reducer -- centralization is inevitable."

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White House authority will be hugely enhanced by new powers of the purse. After Obama takes office on January 20, not only will he have the second half of the $700 billion in TARP funds -- $350 billion -- to deploy to bail out a variety of industries, but, if all goes according to plan, the Democratic Congress will have approved an economic stimulus program of an additional $675 to $775 billion.

The incoming administration has, furthermore, made it clear that it will adamantly oppose efforts by Congress to divert stimulus spending into earmarks -- in effect, making sure that as much control as possible over the stimulus program remains in the executive branch:

"It's important for the American taxpayer to know that it's not - and I want emphasize this having served many years in the Senate -- this is not going to be politics as usual. And we will not tolerate business as usual in Washington. There will be -- I will say it again -- there will be no earmarks in this economic recovery plan. I know it's Christmas. I know it's the Christmas season. But President-elect Obama and I are absolutely determined that this economic recovery package will not become a Christmas tree," Vice President-elect Joseph Biden declared at a December 23 public session with economic advisers.

The Obama administration has already indicated that it wants to use stimulus money for projects that have the potential to provide jobs and to encourage socially beneficial activities, such as investing in "green" technologies, the development of new energy sources, rebuilding decaying infrastructure, and the upgrading of computer access in public schools.

While it remains to be seen what kind of constraints Congress will place on the administration's authority to allocate stimulus money, the administration is likely to have relatively wide latitude over the award of over $1 trillion in combined stimulus money and the remaining $350 billion in TARP funds.

The shift in the balance of power toward the White House is, for some, deeply disturbing.

Progressive author/columnist David Sirota told the Huffington Post: "It is an affront to democracy . . . it goes to the bailout and the rise of what I've called 'czarism.'.... Put another way, democratic processes can slow down decision-making. And in a world where we are trying to compete economically and militarily with undemocratic actors (economically - China; militarily - terrorists, [and] autocratic states like North Korea) that can act instantaneously without the consent of their citizens, we are reflexively competing not by strengthening our democracy, but my subverting it....I think it is deeply troubling - especially from an administration that will be headed by a constitutional lawyer. He [Obama], of all people, should understand how centralizing power in the White House is an affront to the constitution's very clear efforts to limit executive power."

Along similar lines, Robert Blendon, professor of Health Policy and Political Analysis at Harvard's School of Public Health, warns that continued centralization of decision making in the White House conflicts with the "clear cultural shift occurring, particularly among younger people, favoring more transparency in government." Blendon notes that "this is not only a philosophical issue, but one of practical policy. One of the reasons suggested for the failure of the Clinton health plan was its development in the White House environment isolated from the day-to-day views of the Congress and key interest groups."

Former Democratic National Committee chair Don Fowler is unequivocal in his assessment of the upcoming power shift: "Concentration of power in the executive is always fraught with temptations for abuse. Executive power once expanded rarely shrinks to the status quo ante. Further expansion sometimes pauses but rarely recedes. The incoming Administration is no exception to this rule."

Emory political scientist Alan Abramowitz is more sanguine: "Honestly, I think liberals are mostly concerned about this when it involves a Republican president. It's less about concentration of power in the White House than what that power is used for. In this case, Obama clearly intends to use the power of the presidency to advance a progressive agenda on issues ranging from climate change and the environment to labor law, health care, and revitalizing the economy. Congress has an important role to play but every effective president concentrates power in the White House."

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The unprecedented scope of current and projected government spending is difficult to conceptualize: the current $1 trillion-plus spending program, according to researcher Barry Ritholtz is greater than that of such major federal initiatives as the New Deal and the Vietnam War:

• Marshall Plan: Cost: $12.7 billion, inflation adjusted cost: $115.3 billion

• Louisiana Purchase: Cost: $15 million, inflation adjusted cost: $217 billion

• Race to the Moon: Cost: $36.4 billion, inflation adjusted cost: $237 billion

• S&L Crisis: Cost: $153 billion, inflation adjusted cost: $256 billion

• Korean War: Cost: $54 billion, inflation adjusted cost: $454 billion

• The New Deal: Cost: $32 billion (Est), inflation adjusted cost: $500 billion (Est)

• Invasion of Iraq: Cost: $551 billion, inflation adjusted cost: $597 billion

• Vietnam War: Cost: $111 billion, inflation adjusted cost: $698 billion

• NASA: Cost: $416.7 billion, inflation adjusted cost: $851.2 billion


Taking a look at some of the demands for help provides a taste of the kind of power the Obama administration will be able to wield. Just of few of the recent pleaders for federal assistance are the major real estate developers, troubled airlines and the states of Ohio and California.

"You would think that with the state of California getting ready to go over a cliff, that we should be a part of this bailout plan as well, meaning that there should be a direct infusion of cash into the state of California," declared California Assembly Speaker Karen Bass. James C. May, president of the Air Transport Association, put in his bid: "The airlines are not approaching the idea of stimulus spending by looking for a handout from the government, but we do firmly believe that in order to help jump-start the economy, our track record as a 'jobs multiplier' and our essential role in moving people, goods and services efficiently, makes a strong case for wise, strategic investments."

The Obama administration will be the deciding force in determining how to cut up a $1 trillion pie - deciding which industries will thrive and which will die; which states will receive succor, and which will be forced to implement ever more layoffs and higher taxes; whether energy policy will trend towards wind, coal, nuclear, ethanol, water, natural gas, solar, hydrogen, or geothermal solutions; and so forth.

The question, then, is how Obama will exercise power under circumstances that suggest few constraints in his first months in office, and whether he will - thus empowered - master events, or whether they will master him.