Obama's Vision: Only Government Can End Economic Woes

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http://www.mercurynews.com/politics/ci_11411114

By Peter Nicholas

Los Angeles Times

FAIRFAX, Va. — Republican Ronald Reagan once quipped that the most "terrifying words" in the English language were: "I'm from the government, and I'm here to help." Democrat Bill Clinton proclaimed in a State of the Union speech 13 years ago that "the era of big government is over."

But in an address Thursday, President-elect Barack Obama said that government is the solution.

Obama's speech had a practical political purpose: Coaxing lawmakers into quickly passing his massive stimulus plan aimed at reviving an ailing economy. But there was another message embedded in the text.

In his 17-minute talk, Obama previewed what he wants his presidency to be. Rejecting decades of rhetoric casting government as an impediment, he vowed to do more than pull the nation out of its economic downturn. His aim, he said, was for people to drive cleaner cars, study in modernized classrooms and live in buildings powered by wind and sun. The agent for transformation on this sweeping scale, he said, is government.

The president-elect told the audience at George Mason University that only government is capable of ending the worst economic downturn since the Depression.

"Only government," he said, can restore the purchasing power needed to preserve jobs.

He said he would to "act boldly," a phrase echoing Franklin D. Roosevelt's promise, in the teeth of the Great Depression, to pursue "bold, persistent experimentation."

What Obama is trying is the stimulus package. He wants it passed quickly — before Congress leaves town for its February break. The package is big, totaling nearly $800 billion. It contains tax breaks for the middle class, billions for updated bridges, roads and tunnels, and provisions to double the production of alternative energy in three years.

The idea is to lift the economy out of recession, but also to use the crisis to broaden the government's role in large swaths of American life. In Obama's language and in his early plans, presidential experts see a bookend to an anti-government era ushered in by Reagan.

"Ronald Reagan in 1980 began the new conservative era in America. And 2008 is 1980 in reverse," said Allan Lichtman, an expert on the presidency at American University in Washington.

"Reagan famously said government is not the solution, it's the problem," Lichtman said. "Obama is saying government is the solution and, in fact, the only real solution to the crisis we're experiencing today. It's not just a matter of fixing the economy. It's a matter of fundamentally moving the economy in a new direction. And government, not private enterprise, has to take the lead."

Obama has long seen government as a positive force. In his 2006 book, "The Audacity of Hope," he wrote that government "has an important role in opening up opportunity for all," while criticizing President George W. Bush for pursuing a crimped agenda of "tax cuts, reduced regulation, the privatization of government services — and more tax cuts."

For the moment, Obama may find more support for his goals among the general public than on Capitol Hill. Pollsters say that with the economy sinking and joblessness on the rise, people are eager for dramatic action. They may have an innate suspicion of big government but they are prepared to give the new president space to maneuver. Obama seems to be tapping into this sentiment to build grass-roots support for the stimulus package, along with his broader agenda.

Pollster John Zogby said: "The polling is very clear that what Americans want is for somebody to do something. They want problem solving and consensus building. And I think that what Obama got from this election is a pretty free hand. People are going to give him running room."

Ambitious presidential plans are often undone when they reach Congress. Lawmakers in both parties predict the stimulus package will pass. But even before he is sworn in, Obama is running into resistance.

Republican and Democratic members of the tax-writing Senate Finance Committee met privately Thursday to discuss Obama's plan, the first bipartisan meeting of its sort.

Members of both parties emerged from the meeting expressing serious doubts about two elements of the tax proposal — to give employers a tax credit for every job created or saved, and to provide payroll tax relief to people who make too little to pay income taxes.

Democrats were blunt in arguing they did not believe those measures would jolt the economy and spur businesses to hire workers.

"Why would they hire people to build things they cannot sell?" said Sen. Kent Conrad D-N.D.

Sen. Ron Wyden D-Ore. said misgivings over the $700 billion bailout of the financial services industry last year may make it tougher to sell the kind of big-government initiative Obama envisions.

"What Congress faces is enormous skepticism. The bar is very high," he said.

This may be a moment when congressional caution is trumped by the public's hunger for a way out of the financial wreckage. Obama is betting that what Americans want now is FDR-style experimentation — and the vision of expansive government that lies behind it.

Urging Congress to act, Obama said: "For every day we wait or point fingers or drag our feet, more Americans will lose their jobs. More families will lose their savings. More dreams will be deferred and denied. And our nation will sink deeper into a crisis that, at some point, we may not be able to reverse."