Obama Woos Republicans on Stimulus, Seeking Longer-Term Support

Jan. 26 (Bloomberg) -- President Barack Obama proved he could win over Republican voters. Now he’s trying to show he can do the same with the party’s lawmakers.

Obama, a Democrat, plans to visit the U.S. Capitol this week to meet with House Republicans and pitch his $825 billion economic-recovery package -- the kind of reaching out Democrats say George W. Bush almost never did.

Obama’s effort may determine whether his calls for bipartisanship during the presidential campaign will translate into support for the White House’s broader legislative agenda on issues from energy to health care.

The president has called numerous Republican lawmakers to talk about cooperation and win the release of $350 billion in financial-rescue funds, as part of a program that has been used to shore up such lenders as Citigroup Inc. and Bank of America Corp. While Republicans say they are impressed, they’re skeptical about whether he can achieve consensus after years of rancor between the two parties.

“There’s a large difference between gesture and policy,” says House Republican Conference Chairman Mike Pence of Indiana, the party’s No. 3 leader in the House. “The real test for President Obama and his team will be the degree to which they give Republicans and Republican ideas a real hearing.”

For a lasting breakthrough, Obama, 47, will need a broad bipartisan vote on the stimulus measure when it moves through both chambers in coming weeks, says Julian Zelizer, a history professor at Princeton University in New Jersey.

“He’s trying to reverse 20 or so years of bitter history in American politics,” Zelizer says. “If he stumbles with the stimulus, it will make it harder the next time he needs their support.”

Wooing Republicans

Obama -- who last year became the first Democrat to win Republican-leaning Indiana, North Carolina and Virginia in a presidential election since Lyndon Johnson in 1964 -- passed his first test on Jan. 15.

That’s when the Senate rejected by a 52-42 vote a resolution that would have prevented the release of the second half of the Treasury Department’s $700 billion Troubled Asset Relief Program, enacted last year to boost the sagging U.S. financial industry.

Obama sought the speedy release of the funds and lobbied some of the six Republican senators who voted with Democrats to free up the TARP money. One of those senators, Olympia Snowe of Maine, says she received calls from Obama and White House Chief of Staff Rahm Emanuel. After those conversations, she described herself as “leaning in favor” of the move.

Late-Night Meeting

The night before the vote, Obama dispatched Emanuel and top economic adviser Lawrence Summers to the Capitol for a late meeting with Senate Republicans. The following day, Summers sent a letter to leadership offices outlining Obama’s commitment to addressing Republican complaints, including a bias against any further use of the funds to bail out automakers General Motors Corp. and Chrysler LLC.

The administration hasn’t yet said when Obama will go to Capitol Hill to press for his stimulus plan, which may benefit companies from Google Inc. to General Electric Co. to Duke Energy Corp. Spokesman Robert Gibbs said on Jan. 23 that it will be sometime at the beginning of this week.

Obama took heat from congressional Democrats for wanting to devote as much as 40 percent of the stimulus proposal to tax cuts, a position favored by key Republicans. Some Democrats, including Senate Budget Committee Chairman Kent Conrad of North Dakota, say the president’s proposed payroll-tax cut and tax breaks for businesses that hire new workers would do little to lift the economy.

First Hurdle

The House Ways and Means Committee last week approved in a 24-13 vote a stimulus plan that contains about $275 billion in tax cuts, a third of the overall package. Republicans are still pushing for more, potentially straining Obama’s ability to build a bipartisan coalition.

“It would take a significantly larger portion of tax cuts to make it attractive to Republicans,” says Senator John Thune, a South Dakota Republican.

Obama’s decision to go to the Capitol to meet with the opposing party just days after his inauguration is unusual. Bush met only twice in eight years with House Democrats, and only at retreats outside Washington.

Representative Chris Van Hollen of Maryland, a liaison between Obama and congressional Democrats, says the president will need Republican support on a range of issues, including legislation establishing a “cap and trade” system designed to curb greenhouse-gas emissions, which may benefit companies including General Electric.

Breaking With Leadership

To succeed, Van Hollen says, Obama must identify a core group of Republican allies in both chambers willing to break with their party’s leaders. In the Senate, a handful of moderate Republicans who frequently expressed displeasure with Bush’s policies -- including Arlen Specter of Pennsylvania, and Susan Collins and Snowe of Maine -- are the new president’s most likely supporters, Van Hollen says.

The House is a greater challenge because its ranks of moderates have been thinned by retirements and the defeat of centrist Republicans such as Representative Wayne Gilchrest of Maryland in last year’s elections, Van Hollen says.

“We’re hoping a new class of them will rise up,” he says.

Obama may also look to enlist Republican presidential rival John McCain, 72. The Arizona senator’s willingness in the past to buck his party on the budget and on immigration law, among other issues, signals a possible alliance, Princeton’s Zelizer says.

‘Big Prize’

Still, Zelizer says, the “big prize” is Senate Republican leader Mitch McConnell of Kentucky, whose support on the stimulus plan or in other battles may signal the movement of a bloc of Republicans to Obama’s side.

The new president must also retain the backing of Democrats such as House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid. They are used to sparring with Republicans on everything from the Iraq War to energy policy.

Pelosi, 68, sent Obama an early signal of displeasure when he seemed to be seeking a middle ground on tax cuts. Earlier this month, after Summers suggested Obama might delay a campaign promise to raise taxes on households making more than $250,000 to help fund domestic initiatives, Pelosi spoke out about her desire to repeal Bush’s tax breaks for the wealthy.

“I couldn’t be more clear,” Pelosi told reporters on Jan. 8. “Put me down as one in favor of repeal as soon as possible.”

Intra-Party Tension

Republicans have taken note of that intra-party tension, and they wonder how long a honeymoon with Obama can last.

“It might be easier for him to work with us than to work with them,” says Senator John Ensign of Nevada. “He talks like he wants to govern from the center. And many of us believe he really wants to. But I don’t think the Democratic leaders will let him.”