A Warning to the President

Look at the Time

In Congress and the boardroom, failure to recognize a new era.

• By PEGGY NOONAN

It looks like a win but feels like a loss.

The party-line vote in favor of the stimulus package could have been more, could have produced not only a more promising bill but marked the beginning of something new, not a postpartisan era (there will never be such a thing and never should be; the parties exist to fight through great political questions) but a more bipartisan one forced by crisis and marked by—well, let's call it seriousness.

President Obama could have made big history here. Instead he just got a win. It's a missed opportunity.

It's a win because of the obvious headline: Nine days after inauguration, the new president achieves a major Congressional victory, House passage of an economic stimulus bill by a vote of 244-188. It wasn't even close. This is major.

But do you know anyone, Democrat or Republican, dancing in the street over this? You don't. Because most everyone knows it isn't a good bill, and knows that its failure to receive a single Republican vote, not one, suggests the old battle lines are hardening. Back to the Crips versus the Bloods. Not very inspiring.

The president will enjoy short-term gain. In the great circle of power, to win you have to look like a winner, and to look like a winner you have to win. He did and does. But for the long term, the president made a mistake by not forcing the creation of a bill Republicans could or should have supported.

Consider the moment. House Republicans had conceded that dramatic action was needed and had grown utterly supportive of the idea of federal jobs creation on a large scale. All that was needed was a sober, seriously focused piece of legislation that honestly tried to meet the need, one that everyone could tinker with a little and claim as their own. Instead, as Rep. Mike Pence is reported to have said to the president, "Know that we're praying for you. . . . But know that there has been no negotiation [with Republicans] on the bill—we had absolutely no say." The final bill was privately agreed by most and publicly conceded by many to be a big, messy, largely off-point and philosophically chaotic piece of legislation. The Congressional Budget Office says only 25% of the money will even go out in the first year. This newspaper, in its analysis, argues that only 12 cents of every dollar is for something that could plausibly be called stimulus.

What was needed? Not pork, not payoffs, not eccentric base-pleasing, group-greasing forays into birth control as stimulus, as the speaker of the House dizzily put it before being told to remove it.

"Business as usual." "That's Washington." But in 2008 the public rejected business as usual. That rejection is part of what got Obama elected.

Instead the air of D.C. dithering continues, and this while the Labor Department reported Thursday what everyone knew was coming, increased unemployment. The number of continuing claims for unemployment insurance as of Jan. 17 was 4.78 million, the highest in the 42 years they've been keeping records. Starbucks, Time Warner, Home Depot, Pfizer: The AP's count is 125,000 layoffs since January began.

People are getting the mood of the age in their inboxes. How many emails have you received the past few months from acquaintances telling you in brisk words meant to communicate optimism and forestall pity that "it's been a great ride," but they're "moving on" to "explore new opportunities"? And there's a broad feeling one detects, a kind of psychic sense, some sort of knowledge in the collective unconscious, that we lived through magic times the past half-century, and now the nonmagic time has begun, and it won't be over next summer. That's not the way it will work. It will last a while.

There's a sense among many, certainly here in New York, that we somehow had it too good too long, a feeling part Puritan, part mystic and obscurely guilty, that some bill is coming due. Hard to get a stimulus package that addresses that. (The guilt was part of the power of Blago. He's the last American who doesn't feel guilt. He thinks something is moral because he did it. He's like a good-natured Idi Amin, up there yammering about how he's a poor boy who only wanted to protect the people of Chicago from the flu. You wish you could believe it! You wish he really were what he is in his imagination, a hero battling dark forces against the odds.)

I think there is an illness called Goldmansachs Head. I think it's in the DSM. When you have Goldmansachs Head, the party's never over. You take private planes to ask for bailout money, you entertain customers at high-end spas while your writers prep your testimony, you take and give huge bonuses as the company tanks. When you take the kids camping, you bring a private chef. Goldmansachs Head is Bernie Madoff complaining he's feeling cooped up in the penthouse. It is the delusion that the old days continue and the old ways prevail and you, Prince of the Abundance, can just keep rolling along. Here is how you know if someone has GSH: He has everything but a watch. He doesn't know what time it is.

I remember the father in the movie script of "Dr. Zhivago," inviting what's left of his family, huddled in rooms in what had been their mansion, picking up the stump of a stogie and inviting them to watch the lighting of "the last cigar in Moscow."

When you have GSH, you never think it's the last cigar.

But you don't have to be on Wall Street to have GSH. Congress has it too. That's what the stimulus bill was about—not knowing what time it is, not knowing the old pork-barrel, group-greasing ways are over, done, embarrassing. When you create a bill like that, it doesn't mean you're a pro, it doesn't mean you're a tough, no-nonsense pol. It means you're a slob.

That's how the Democratic establishment in the House looks, not like people who are responding to a crisis, or even like people who are ignoring a crisis, but people who are using a crisis. Our hopeful, compelling new president shouldn't have gone with this bill. He made news this week by going to the House to meet with Republicans. He could have made history by listening to them.

A final point: In the time since his inauguration, Mr. Obama has been on every screen in the country, TV and computer, every day. He is never not on the screen. I know what his people are thinking: Put his image on the age. Imprint the era with his face. But it's already reaching saturation point. When the office is omnipresent, it is demystified. Constant exposure deflates the presidency, subtly robbing it of power and making it more common. I keep the television on a lot, and somewhere in the 1990s I realized that Bill Clinton was never not in my living room. He was always strolling onto the stage, pointing at things, laughing, talking. This is what the Obama people are doing, having the boss hog the screen. They should relax. The race is long.

As a matter of fact, they should focus on that: The race is long. Run seriously.

A Warning to the President

A Warning to the President

The cost of abdicating to Nancy Pelosi.

Barack Obama promised to end the "politics of division," unite Washington's factions and overcome partisanship. And what do you know -- so far he has: The President's stimulus plan generated bipartisan House opposition, with every Republican and 11 Democrats voting against it on Wednesday. It passed 244-188.

The political class is feigning shock that Mr. Obama's stylistic olive branches to the GOP -- cocktail hour at the White House, cutting a line item for shrubbery on the National Mall -- failed to peel off even a single vote across the aisle. The chatter is that Republicans were taking a great political risk to oppose a President with 70%-plus approval ratings on his first piece of legislation.

But the real risk here is to Mr. Obama, and it isn't from Republicans. It's from his fellow Democrats. Given the miserable economy and the Beltway's neo-Keynesian policy consensus, a true compromise would have gathered overwhelming support. But rather than use Mr. Obama's political capital to craft such a deal, the White House abdicated to Speaker Nancy Pelosi. House Democrats proceeded to ignore all GOP suggestions as they wrote the bill, shedding tax cuts while piling on spending for every imaginable interest group. The bipartisan opposition reflects how much the Pelosi bill became a vehicle for partisan social policy rather than economic stimulus.

Genuine bipartisanship means compromises on policy, not photo-ops and hand shakes. The last two Democratic Presidents, Jimmy Carter and Bill Clinton, also came to power with big Democratic majorities in Congress, veered far to the left on policy, and quickly came undone. To adapt White House Chief of Staff Rahm Emanuel's now famous line, a 70% approval rating is a terrible thing to waste on the ideas of Henry Waxman and Pete Stark.

Democratic Stealth Care

Democratic Stealth Care

With the nation preoccupied by the financial crisis, Democrats have been quietly working to nationalize health care.

• By KIMBERLEY A. STRASSEL

Tom Daschle is still waiting to be confirmed as secretary of health and human services, not that he's in any rush. Democrats are already enacting his and Barack Obama's agenda of government-run health care -- entirely on the QT.

Martin Kozlowski

This was the real accomplishment of this week's House vote for the $819 billion "stimulus," and is the overriding theme of Congress's first month. With the nation occupied with the financial crisis, and with that crisis providing cover, Democrats have been passing provision after provision to nationalize health care.

If Democrats learned anything from the HillaryCare defeat, it was the danger of admitting to their wish to federalize the health market. Since returning to power, they've pursued a new strategy: to stealthily and incrementally expand government control. "What no one is paying attention to in the [stimulus]," says Wisconsin Rep. Paul Ryan, "is that Democrats are making a big grab at the health-care sector."

It began one week after the swearing-in, when Nancy Pelosi whipped through a big expansion of the State Children's Health Insurance Program. The Schip bill was Democrats' first stab at stealth expansion, unveiled in 2007, though vetoed by George W. Bush.

Initially designed for children of working-poor families, this new Super-Schip will be double in size, and even kids whose parents make $65,000 a year will be eligible. The program will also now cover pregnant women and automatically enroll their new arrivals. The Congressional Budget Office estimates 2.4 million individuals will drop their private coverage for the public program.

Still, it's the "stimulus" that has proven the real gift horse -- a behemoth that has allowed Democrats to speed up the takeover of health care under cover of an economic crisis. They initially claimed, for instance, the "stimulus" would provide Medicaid money to states struggling to pay existing bills. What in fact it does is dramatically expand the number of Americans who qualify for Medicaid.

Under "stimulus," Medicaid is now on offer not to just poor Americans, but Americans who have lost their jobs. And not just Americans who have lost their jobs, but their spouses and their children. And not Americans who recently lost their jobs, but those who lost jobs, say, early last year. And not just Americans who already lost their jobs, but those who will lose their jobs up to 2011. The federal government is graciously footing the whole bill. The legislation also forbids states to apply income tests in most cases.

House Democrat Henry Waxman was so thrilled by this blowout, it was left to Republicans to remind him that the very banking millionaires he dragged to the Hill last year for a grilling would now qualify for government aid. His response? A GOP proposal to limit subsidies to Americans with incomes under $1 million was accepted during markup, but had disappeared by final passage. In this new health-care nirvana, even the rich are welcome. CBO estimates? An additional 1.2 million on the federal Medicaid dime in 2009.

The "stimulus" also hijacks Cobra, a program that lets the unemployed retain access to their former company health benefits -- usually for about 18 months. The new stimulus permits any former employee over the age of 55 to keep using Cobra right up until they qualify for Medicare at age 65. And here's the kicker: Whereas employees were previously responsible for paying their health premiums while on Cobra, now the feds will pay 65%. CBO estimates? Seven million Americans will have the feds mostly pay their insurance bills in 2009.

The bill even takes a whack at the private market. Under the guise of money for "health technology," the legislation makes the government the national coordinator for electronic health records, able to certify what platforms are acceptable. This is an attempt to squelch a growing private market that is competing to improve transparency and let consumers compare providers and costs. In liberal-world, only government should be publishing (and setting) health-care prices.

Add it up, and Democrats may move 10 million more Americans under the federal health umbrella -- in just four weeks! Good luck ever cutting off that money. Meanwhile, the Democratic majority is gearing up for a Medicare fight, where it may broach plans to lower the eligibility age to 55. Whatever costs accrue, they'll pay for by slashing the private Medicare Advantage option.

Mr. Obama will, of course, offer his health-care reform at some point. But he's clearly happy to get what he can, when he can. Despite talk of entitlement reform, he's voiced no disapproval of this vast new health-care grab. And don't forget he chose Mr. Daschle, who appreciates stealth himself. In his 2008 book outlining his health-care reform, he offers his party two pieces of political advice: Move fast, before there can be a public debate, and write as vague a bill as possible.

Guiding all of this is the left's hope that by the time America wakes up to what's happening, it'll be too late. Democrats might be on to something.

Dodd of Indignation

Dodd of Indignation

Wall Street bonuses and sweetheart mortgages: Compare and discuss.

Senate Banking Chairman Chris Dodd has been in typically indignant form this week, opining on the financial crisis. Before his Tuesday hearing on Bernard Madoff, he demanded that regulators get to the bottom of any crime: "American investors deserve an explanation and the responsible parties must be held accountable!" And yesterday the Connecticut Senator denounced Wall Street bonuses and said, "I am urging -- in fact, not urging, demanding -- that the Treasury Department figures out some way to get the money back."

AP

Pardon us, Senator, but how about taking your own advice?

We refer to his promise to release mortgage documents for the two properties that he and his wife refinanced with Countrywide Financial in 2003. In June a former Countrywide loan officer charged that Mr. Dodd received preferential rates and had fees waived on those loans as part of a VIP program the company had for "friends" of the company's then-CEO Angelo Mozilo. Mr. Dodd first issued a denial and then, days later, acknowledged that he was a "VIP" with Countrywide but said he thought it was "more of a courtesy." In late June he pledged to make all pertinent documents public "at some point." We're still waiting.

Dodd Bedfellows

• Dodd and Countrywide 10/10/2008 – The Senator should take the witness stand.
• Mortgage VIPs 06/25/2008 – Sweetheart deals are just a phone call away.
• Angelo's Angel 06/19/2008 – The senate bailout for Countrywide needs more scrutiny.
• Congress and the Countrywide Scandal 06/18/2008 – Some senators want a bailout for big political donors. What a surprise.
• Beltwaywide Financial 06/16/2008 – The new ARMs: Angelo-rated mortgages for senators.

Increasing accountability is critical to rebuilding public trust in the financial system, as the Senator keeps telling us. Countrywide was one of the most irresponsible lenders in the subprime frenzy but it did not act alone. One reason it could pump out so much bad paper is because Fannie Mae and Freddie Mac were around to buy it and then resell it with a taxpayer guarantee. Messrs. Dodd and Mozilo were two of Fan and Fred's biggest supporters, with Mr. Dodd playing a role in pushing the companies to take on "affordable housing" loans from outfits like Countrywide.

Perhaps Connecticut's longest serving Senator was bamboozled by Mr. Mozilo and used bad judgment in backing the reckless lender. But loan officer Robert Feinberg, who oversaw Countrywide's VIP program, says Mr. Dodd knew he was getting favors from Mr. Mozilo. Mr. Feinberg says his job was to remind beneficiaries at every step of the process that they were getting a special deal because they were "Friends of Angelo." If true, it would mean that the Senator had a clear conflict of interest as a legislator promoting the business of a company doing him personal favors. Recall the Ted Stevens precedent.

The way to clear this up is to see all the documents and get Mr. Dodd to explain what happened, preferably under oath. But Mr. Dodd has been stonewalling. In July he said he would release the documents after President Bush signed the first housing bailout bill. Nothing. Then in October he said he wanted to wait until the Senate Ethics Committee completed its investigation.

That could take a while. On July 28 Ethics Chairman Barbara Boxer (D., Calif.) and Vice Chairman John Cornyn (R. Texas) issued a press release that explained "it has been the long-standing policy of the committee to defer investigation into matters where there is an active and ongoing criminal investigation and proceeding so as not to interfere in that process."

Earlier this month, Mr. Dodd's office confirmed that the law firm Perkins Coie has provided "ethics advice" to him, and we can't help but wonder what that entailed. The delay at the Ethics Committee in no way impedes Mr. Dodd from honoring his disclosure pledge. It's in his political interest to do so, assuming he has nothing to hide. A recent Quinnipiac poll showed his approval rating down to an all-time low of 47%. Rare is the politician who could clear his name overnight and chooses not to.