Obama's stumble

A miniature basketball drops into the plastic ring attached to the top of one of the White House’s imposing panelled doors. The West Wing staffers, a spectroscope of teeming bright young things, blend shooting the odd hoop with chit-chats about health reform, race in America, and presidential seating plans. Over in the East Wing, 300 reporters gather to hear the president. The foreign contingent are mesmerised by the man himself and his scholarly hour-long soliloquy on health economics. Yet to millions of Americans listening at home, President Obama’s fourth schedule-clearing press conference to the nation on 22nd July fell a little flat.

With the economy in the doldrums, his opponents believe that a failure on the vexed issue of healthcare reform might even mark the beginning of the end of his presidency, and so the grassroots Republican fury machine has been fired up. Their soundbites have fast become familiar. The president is a socialist. The president is un-American. The president is actually not American. In August his poll numbers dipped to the low 50s for the first time.

Obama’s troubles deepened during that same nationwide broadcast when he blundered into the controversy surrounding the arrest of Henry Louis Gates, a leading African-American intellectual, using the presidential pulpit to criticise the arresting police officer. A well-intentioned effort to highlight the problems with racial profiling became the lead item on the evening news for days, and forced a presidential apology.

On the economy he ought to be on firmer ground, especially given his claims that his stimulus package has “put the brakes on recession.” Yet a few miles from the White House, in Baltimore, the president’s economic problem is there for all to see: 33,000 repossessions since 2006, with rows of boarded-up housing and collapsing tax revenues. Unemployment nationwide hovers just below 10 per cent—a European level of joblessness, without European-style welfare. And during the country’s worst slump since the great depression it doesn’t help that rescued banks are again making profits; some, record ones. In the past year, 4,793 employees of government-backed banks won million-dollar bonuses (311 got over $5m, 37 above $10m). Anger is brewing about all of this from both left and right.

This creates a less than ideal background for healthcare reform, an area that is complicated, concerns life and death, and is riven with vested interests making billions from the status quo. It is a recipe for inertia—and a political tripwire that upended President Clinton’s first term too.Knowing this, Obama approached his goal with remarkable caution. He initially set out only the vaguest of principles: reform should not add to the already-ballooning deficit, rising healthcare costs should slow, insurance coverage should cover 97 per cent of Americans, and extra costs should not fall on middle America. Those principles established, he tasked Congress with figuring out how to enact them. Given that both houses are Democrat-controlled this sounded sensible, especially now senate Democrats have the 60-seat majority needed to force votes through, assuming two sick senators are wheelchaired in.

The White House also carefully neutralised opposition from big drug companies with a controversial backroom deal in which the government pledged to keep overpaying for pharmaceuticals—a longstanding backdoor subsidy that Obama had attacked during his campaign. In return, the companies offered $80bn of voluntary price cuts and paid for adverts backing the reform plans. Obama has also praised Republican ideas, such as the US equivalent to the National Institute for Clinical Excellence set up by President Bush to advise Congress on the cost-effectiveness of purchases for Medicare, the pensioner health programme.

Yet the president’s original August deadline for the healthcare reform bill has passed. With the US budget deficit soon likely to be quadruple even 2008’s record, senators preferred to ruminate over the various plans on offer rather than act.

Obama still says the “stars are aligned” for success before the end of 2009. Yet health insurance companies have been funding the anti-reform lobby and, across the country, public meetings meant to help Congressman sell change have been disrupted by angry activists. The president’s opponents are playing dirty, with accusations that reforms will introduce socialised medicine and “death panels” for the elderly, as well attacking the NHS. Obama’s response has been to tread gently. But if he waits too long to take on opponents, he risks losing more public support.

Plans emerging from Congress suggest a tax on millionaires to pay for the plan. But with the prospect of other tax rises in 2010, fiscal conservatives in Congress (and especially the moderate “blue dog” Democrats) worry that reforms will still cost too much. A more liberal group of congressmen have promised a counter veto if the proposals are watered down, and complained loudly when the president seemed to weaken his commitment to a “public option”—a government-owned health insurer, which liberals consider an essential part of any reform. The real question, then, is not how Obama wins over his opponents, but when he will assert himself over his own party. He has yet to crack the whip.

Healthcare is a problem no one can afford to ignore. Americans spend one in every six dollars on it, yet 47m of them have no health insurance, and over 60 per cent of personal bankruptcies are due to medical bills. Though daunting, reform is not an impossible goal. Change on this scale has happened before in tough times: America introduced publicly funded pensions during the penury and hunger of the great depression. And while Obama’s popularity has wobbled, it is not yet in precipitous decline.

All honeymoons end. But it is perhaps the fault of this president that he has sought too hard to prolong his. His ponderous efforts to include his political foes in the debate seem to have backfired. The summer of angry protest shows that the partisan prism of US politics remains entrenched, and unchanged by Obama’s election. If the gloves don’t come off soon, he risks changing very little.