Phil Gramm: How Obama Transformed America

aeiBy Phil Gramm

His progressive legacy won’t last because he passed vague laws and abused his executive power to impose policies that are unpopular.

BN-JY759_edp082_J_20150823123238How did Barack Obama join Franklin Roosevelt and Ronald Reagan to become one of the three most transformative presidents in the past century? He was greatly aided by the financial crisis that erupted during the 2008 campaign. This gave the new president a mandate and a large Democratic congressional majority that fully embraced his progressive agenda.

Having learned from previous progressive failures, President Obama embarked on a strategy of minimizing controversial details that could doom his legislative efforts. But no factor was more decisive than his unshakable determination not to let Congress, the courts, the Constitution or a failed presidency—as America has traditionally defined it—stand in his way.

Americans have always found progressivism appealing in the abstract, but they have revolted when they saw the details. President Clinton’s very progressive agenda—to nationalize health care and use private pensions to promote social goals—was hardly controversial during the 1992 election. But once the debate turned to the details, Americans quickly understood that his health-care plan would take away their freedom. Even Mr. Clinton’s most reliable allies, the labor unions, rebelled when they understood that under his pension plan their pensions would serve “social goals” instead of maximizing their retirement benefits.

In its major legislative successes, the Obama administration routinely proposed not program details but simply the structure that would be used to determine program details in the future. Unlike the Clinton administration’s ill-fated HillaryCare, which contained a detailed plan to control costs through Regional Healthcare Purchasing Cooperatives and strictly enforced penalties, ObamaCare established an independent payment advisory board to deal with rising costs. The 2009 stimulus package was unencumbered by a projects list like the one provided by the Clinton administration, which doomed the 1993 Clinton stimulus with ice-skating warming huts in Connecticut and alpine slides in Puerto Rico.

The Obama stimulus offered “transparency” in reporting on the projects funded but only after the money had been spent. Similarly the 2010 Dodd-Frank financial law defined almost nothing, including the basis for designating “systemically important financial institutions” that would be subject to onerous regulation, what bank “stress tests” tested, what an acceptable “living will” for a financial institution looked like or what the “Volcker rule” required.

LIfe 2x 3In addition to a filibuster-proof majority in the Senate, Mr. Obama benefited from unprecedented Democratic support in Congress. Congressional Quarterly reported that “Obama’s 98.7% Senate success score in 2009 was the highest ever,” surpassing LBJ’s 93%, Clinton’s 85% and Reagan’s 88%. Reagan’s budget, tax cuts, Social Security reform and tax reform programs all had significant bipartisan input and garnered the strong Democratic support they needed to become law. But ObamaCare had no bipartisan input and did not receive a single Republican vote in Congress. The Obama stimulus package received no Republican votes in the House and only three Republican votes in the Senate. Dodd-Frank received three Republican votes in the House and three in the Senate.

Voters used the first off-year election of the Obama presidency to express the same disapproval that they had expressed in the Clinton presidency. Democrats lost 54 House and eight Senate seats in 1994, and 63 House and six Senate seats in 2010.

Mr. Clinton reacted to the congressional defeat by “triangulating” to ultimately support a bipartisan budget and tax compromise that fostered broad-based prosperity and earned for him the distinction of being one of the most successful modern presidents. Mr. Obama never wavered. When the recovery continued to disappoint for six long years he never changed course. Mr. Clinton sacrificed his political agenda for the good of the country. Mr. Obama sacrificed the good of the country for his political agenda.

The Obama transformation was achieved by laws granting unparalleled discretionary power to the executive branch—but where the law gave no discretion Mr. Obama refused to abide by the law. Whether the law mandated action, such as income verification for ObamaCare, or inaction, such as immigration reform without congressional support, Mr. Obama willfully overrode the law. Stretching executive powers beyond their historic limits, he claimed the Federal Communications Commission had authority over the Internet and exerted Environmental Protection Agency control over power plants to reduce carbon emissions.

When Obama empowered himself to declare Congress in “recess” to make illegal appointments that the courts later ruled unconstitutional, he was undeterred. In an action that Lyndon Johnson or Richard Nixon would have never undertaken, Mr. Obama pushed Senate Democratic Leader Harry Reid to “nuke” the rights of minority Senators to filibuster judicial nominees and executive appointments by changing the long-standing 60-vote supermajority needed for cloture to a simple majority.

American democracy has historically relied on three basic constraints: a shared commitment to the primacy of the constitutional process over any political agenda, the general necessity to achieve bipartisan support to make significant policy changes, and the natural desire of leaders to be popular by delivering peace and prosperity. Mr. Obama has transformed America by refusing to accept these constraints. The lock-step support of the Democrats’ supermajority in the 111th Congress freed him from having to compromise as other presidents, including Reagan and Mr. Clinton, have had to do.

While the Obama program has transformed America, no one is singing “Happy Days Are Here Again” or claiming it’s “morning in America.” Despite a doubling of the national debt and the most massive monetary expansion since the Civil War, America’s powerhouse economy has withered along with the rule of law.

The means by which Mr. Obama wrought his transformation imperil its ability to stand the test of time. All of his executive orders can be overturned by a new president. ObamaCare and Dodd-Frank can be largely circumvented using exactly the same discretionary powers Mr. Obama used to implement them in the first place. Republicans, who never supported his program, are now united in their commitment to repeal it.

Most important, the American people, who came to embrace the Roosevelt and Reagan transformations, have yet to buy into the Obama transformation. For all of these reasons it appears that the Obama legacy rests on a foundation of sand.

Mr. Gramm, a former Republican senator from Texas and chairman of the Senate Banking Committee, is a visiting scholar at the American Enterprise Institute.

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