Tuesday, November 11, 2008

Obama walks a tight rope between change and continuity

Business Times - 12 Nov 2008

By LEON HADAR
WASHINGTON CORRESPONDENT

THE meeting between US President-elect Barack Obama and President George W Bush at the White House on Monday during which they talked about the economic and national-security problems is part of the ritual of the transition of power that takes place every four years.

But at a time when America is confronting one of the most devastating economic crisis in recent memory and its military forces are engaged in two major wars, in Iraq and Afghanistan - three wars if you add the war on terrorism to the list - the handing of the nation's top leadership position from a failed and controversial president to a one who promises to mount dramatic changes in US domestic and foreign policies acquires a historic significance.

Indeed, historians compare the passing of the presidential torch from Mr Bush to Mr Obama to another important change that took place when Republican president Herbert Hoover lost the election to Democratic challenger Franklin D Roosevelt in 1932. That election took place three years after a destructive crash on Wall Street and as the country was entering into the Great Depression.

At that time, the transition between one president to another was longer: the inauguration of the new president didn't take place until March 1933. And the incoming Democratic president resisted pleas by Mr Hoover to provide him with political support for several important decisions he was contemplating, including a bank holiday, during the five-month transition period.

Since then the transition phase has been shortened by two months and incoming presidents have been less reluctant to cooperate with the outgoing White House occupants during that time. In fact, like other new presidents, Mr Obama has formed a transition team led by John Podesta, a former Clinton administration official. Mr Podesta told reporters that Mr Obama would push Congress to enact 'at least part' of an economic package even before he takes office in January. But he also stressed the problems Americans are facing need short and long-term approaches.

During a press conference in Chicago on Friday, Mr Obama emphasised that he was going to meet Mr Bush 'with a spirit of bipartisanship and a sense that both the President and various leaders in Congress all recognise the severity of the situation right now and want to get stuff done'.

But during the race to the White House, Mr Obama reiterated again and again that he was campaigning against Mr Bush's 'failed policies'.

On the one hand, Mr Obama wants to be seen as a new leader who is operating in the spirit of bipartisanship and is trying to unite the nation in the aftermath of a heated election season and the divisive eight years of the Bush administration. At the same time, the President-elect is committed to making forceful changes in policy and style during his term in office - accelerating the time-table for withdrawal from Iraq, strengthening the federal government's role in the economy, and embracing an ambitious environmental agenda - that will accentuate the political and ideological differences between the Democrats and the Republicans.

But then, turning too much to the left could antagonise the many independent voters and Republicans among Mr Obama's supporters and make it more difficult for Mr Obama to govern in the next four years.

Hence the dilemma President-elect Obama is facing: Pressure from political allies to undo - and as soon as possible - his predecessor's policies balanced by the need to maintain a sense of continuity between the old Republican and the new Democratic administration.

There is another issue - the one-president-at-a-time rule - that a president-elect has to deal with during the transition period, especially when it comes to foreign policy. Mr Obama doesn't want to assume responsibility for policies that will be made in the next two months. And he also doesn't want to make statements that may sound as though he is trying to undermine the policies of the current president and, as a result, sending mixed signals to both foreign allies and foes.

That explains why Mr Obama's transition team is not expected to announce any dramatic changes in US policy towards Iran before Inauguration Day. In fact, that sense of continuation in foreign policy could continue as Mr Obama deals with the pressing economic problems during his first months in office. Several of his allies have suggested that he may even decide to keep Robert Gates as defence chief as part of an effort to underline this foreign-policy continuity.

But reflecting the powerful momentum for change and the more progressive economic and social agenda shared by Mr Obama and his aides, his transition team made it clear during the weekend that the President-elect was planning to reverse many of the executive orders - rules a president can impose without Congressional approval - issued by President Bush after he had entered office.

Among other things, the new president is planning to restart research on stem cells, stop drilling for oil in environmentally sensitive areas within the United States and permit state governments to strengthen regulations for vehicle emissions. (Ironically, one of the first executive orders that President Roosevelt had issued after entering office was a six-day bank holiday that his processor wanted to enact).

At the same time, Mr Podesta and Rahm Emanuel, the Congressman from Illinois who Mr Obama has selected as his White House chief-of-staff, have reiterated the President-elect's commitment to pass a huge economic stimulus package, including middle-class tax cut and an extension of unemployment benefits, as part of a wider effort on the part of the federal government to revive the economy through fiscal measures.

If such a package wouldn't be approved by Congress during the current lame-duck session of the outgoing Congress, Mr Obama is expected to make its first priority after assuming office. The new administration and the Democrats are also planning to consider the US$25 billion in low-interest loans to the American car industry that was already approved by Congress. Less clear is whether the new Obama administration is going to press immediately for tax increases on the wealthiest Americans, a move that could retard economic recovery.


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