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By Michael Lubell, APS Director of Public Affairs
December was a particularly good month for Wall Street. And banking interests owe President Obama big time for his part in their largess.
What he did was clear. Why he did it remains a matter of speculation. But he might just be preparing to take a page from Bill Clinton’s playbook and spend his next two years as “triangulator”-in-chief. Science, take note!
Here’s what played out in the waning days of the 113th Congress: With just hours left on the budget clock, Capitol Hill was mired in another legislative morass of its own making. Having put the government on autopilot before the November election, lawmakers returned to a lame-duck session facing a December 11 midnight spending deadline. That’s when the stopgap continuing resolution was scheduled to run out. And if they didn’t take any action, the government would shut down.
House and Senate appropriators and their staff had spent much of the previous month hammering out budget compromises well into the wee hours. And their efforts paid off, generating more than 1,500 pages of directives in an omnibus bill that covered the fiscal year 2015 spending plans laid out by 11 of the 12 appropriations subcommittees. The 12th one, which would have funded the Department of Homeland Security (DHS), was put on a short-term continuing resolution as a concession to far-right Republicans who were seeking retribution for President Obama’s executive action on immigration — which they assert is illegal and unconstitutional.
The bargain, a “Cromnibus” in Beltway-speak, received a reluctant blessing from congressional leaders of both parties, as well as the White House. In an unusual display of bipartisanship, lawmakers were on the verge of doing the unthinkable: taking sensible action that would keep Washington functioning.
Then, with few eyes focused on their machinations, Wall Street lobbyists, who had been thwarted repeatedly during the last few years, managed to insert language that would gut key provisions of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. The stealthy sentences would allow big banks to engage again in risky practices — trading credit default swaps, buying and selling opaque derivatives, and issuing collateralized debt obligations — all guaranteed by taxpayer money. If their bets come home, Wall Street firms could rake in hundreds of billions of dollars, and if they blow up completely, taxpayers once more would be on the hook for a trillion-dollar tab.
Led by Citibank and J.P. Morgan Chase — Chase’s CEO, Jamie Diamond, reportedly made many of the calls to key legislators himself — Wall Street left its indelible imprint on the Cromnibus.
For Democrats, who had nearly gagged on the DHS deal, the Dodd-Frank gutting was too much to stomach. And as the House prepared to vote on the bill’s rule — the first step in the chamber’s legislative process — Democrats signaled they would not provide a single vote in favor. Under pressure from House Speaker, John Boehner (R-Ohio), some Tea Party Republicans agreed to support the bill’s rule, but many said they would oppose its final passage. Unless Democrats broke ranks, the Cromnibus would die, and the government once again would face an imminent shutdown.
The rule passed, but only by the razor-thin margin of 214 to 212. The bill, itself, was facing certain defeat. So Speaker Boehner used the only tool he had immediately available. He declared a recess.
Enter Barack Obama. Bucking his own party, he lobbied House Democrats hard, arguing that pragmatism should be the new political maxim. In the end, he managed to cajole 57 of them into heeding his plea. And at the 11th hour the bill passed, 219 to 206, with 67 Republicans joining 139 Democrats in opposition and 162 of them sticking with the GOP leadership.
During a press briefing afterward, the president openly acknowledged that he was staking out new strategic ground in advance of the 114th Congress, which Republicans will fully control.
Obama’s actions, which split the Democrats, galled many of them, including the party’s House Leader, Nancy Pelosi (D-Calif.). His approach was all too reminiscent of Bill Clinton’s rapid pivot to the center following the 1994 midterm election that gave Republicans control of the House for the first time in 40 years.
During Clinton’s final six years in office, Washington came to recognize there were three separate power centers to be conjured with: congressional Republicans, congressional Democrats and the White House. Dick Morris, a political consultant, who has been famous for working both sides of the aisle and had advised Clinton to adopt the new third-way strategy, called it “triangulation.” And the name stuck. So did the presidential strategy, which many political analysts credit for the success and public popularity Clinton enjoyed until he left office in 2001.
It is possible President Obama had other motivations when he threw some of his party’s leaders under the Cromnibus, but I doubt it. Legacy has to be on his mind, and the legend of Bill Clinton might be shaping up as his guide star. If Obama adopts a triangulation posture, the science community, which has long emphasized the need for support across party lines on Capitol Hill, will have to acknowledge the importance of the White House as a separate actor in the final years of POTUS 44.
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