President Obama's first steps into serious policy-making were marred by mistakes and missed opportunities during the past year. Despite making significant legislative headway on an ambitious domestic agenda, Democratic leadership was out-messaged and out-maneuvered on each of last year's three biggest issues the stimulus, health care and Afghanistan by an internally divided rump party that bent over backwards to embarrass and discredit itself. If the Democrats cannot find an issue on which to turn the tables and repair their damaged political brand heading into this year's pivotal midterm elections, they risk a disastrous and dispiriting blowout that could handicap President Obama for his remaining tenure.
The extent to which the Democrats have been dominated in the public opinion war since President Obama took office is as embarrassing as it is shocking. The stimulus package has been branded a boondoggle and the roller coaster battle over the health-care bill damaged Democratic approval ratings. Then President Obama chose to escalate the unpopular war in Afghanistan tying his political fortunes to the daunting prospect of pacifying and rebuilding an inhospitable nation that has never been effectively centrally governed in its history.
All of these follies have led to an astonishing enthusiasm gap between the two parties, with only 56 percent of Democrats planning to vote next year compared to 81 percent of Republicans as of November, according to a recent poll by the liberal Daily Kos blog. Without an issue to galvanize the Democratic base and manipulate the conservatives' purist dogma, the Republicans could even take back the House.
Fortunately, such an issue exists in the prospect of comprehensive banking reform. Last November, the Senate Finance Committee led by retiring Chairman Chris Dodd, D-Conn., proposed a bill to completely overhaul banking regulation in this country by establishing three new regulatory agencies to oversee systemic financial stability, the practices of private institutions and insurance policies respectively. President Obama and other Democratic leaders should work tirelessly to advance this bill and make it the centerpiece of their 2010 agenda.
The bill itself is both untenable and unpassable, a classic example of a good theory crippled by overreach, practicality issues and the realities of fighting entrenched interests. Passing the bill, however, is hardly the point. The move itself would be similar to President Bush's strategy of talking up the potential marriage amendment leading to the 2004 election. The idea was never actually to attempt to pass the bill, but rather to galvanize his base.
The issue of banking reform is perfect politically for a number of reasons. First, the proposed regulation mostly impacts large Wall Street corporations and insurance companies possibly the groups garnering the least amount of public sympathy on this side of Al Qaeda. The Democrats would be wise to attempt to recapture the populist outrage that propelled them to their current majorities.
Second, this issue forces Republicans into taking the unpopular position of defending millionaires, allowing Democrats to brand them as corporate lackeys and out of touch oligarchs. Given Wall Street's role in creating the current financial slump, any zealous anti-regulation stance would likely be terribly unpopular among independents.
Finally, elevating banking reform into the national conversation would exploit the deep fissures and infighting of the Republican Party and undermine their ability to coordinate a national electoral strategy for the midterms. The Mitt Romney corporate wing has vastly different ideas on banking regulation than the Sarah Palin "cultural populist" (or "teabagger") wing of the party, and this tension could further exacerbate the trend toward bloodbath Republican primaries that cost them New York's 23rd congressional district last November. The three issues that dominated the national agenda last year allowed Republican leaders to stay on the same page, and their relentless and withering attacks proved effective at cowing the Democrats. The more divided the opposition is, the better chance the Democrats have at limiting their midterms losses.
President Obama is a man of many talents but as last year showed, the political theater is not kind to idealists. He needs to use his bully pulpit to prove that he's capable of the partisan gesturing it takes to win in Washington. Barring that, he could be in for another long year.
