Fresh from a nail-biting triumph with his economic stimulus package, Barack Obama will head to the American heartland on Monday in an attempt to win public support for his massive rescue Bill.
Adopting the no-holds-barred tactics honed during his election campaign, the president is to hold “town hall” meetings in Indiana and Florida, speaking in towns hit hard by rising unemployment. The publicity blitz is aimed at persuading Americans that the government help will get them out of their economic mess.
It is not an easy sell. Obama’s trip comes after winning the first major battle of his presidency in getting the support of just enough Republicans to ensure his $800-billion stimulus is passed in the Senate. The victory, however, was narrow and came after a bitter political fight that revealed fault lines in Washington that are echoed across America.
Agreement was reached only after several days of horse-trading that caused dramatic scenes in the Capitol as Obama and his top staff urged the Senate to move the legislation forward. Finally, late on Friday and with Democrats threatening to fly in the desperately ill Senator Ted Kennedy to ensure they had enough votes, a compromise deal was struck with three Republican rebels. The Bill now looks certain to pass this week, though tens of billions of dollars of spending has been stripped out of it.
But the razor-thin victory barely presents Obama with any breathing space in the face of an economic crisis that is worsening and a Republican party that is increasingly strident in its opposition to the White House.
Indeed, Obama turned up the heat on Saturday by lambasting Republicans who opposed the stimulus package. In his weekly radio address, he painted them as out of touch and stuck in the policies of the past that had caused the crisis. “We can’t expect relief from the tired old theories that … doubled the national debt, threw our economy into a tailspin and led us into this mess in the first place,” he said. “We can’t rely on a losing formula that offers only tax cuts as the answer to all our problems while ignoring our fundamental economic challenges.”
Obama said that swift passage of the plan had been needed in order to avert financial disaster. In language that left no room for doubt, he warned of a “national catastrophe” if nothing was done. “The scale and scope of this plan is right, and the time for action is now. If we don’t move swiftly, our economic crisis could become a national catastrophe. Millions of Americans will lose their jobs, their homes and their healthcare. Millions more will have to put their dreams on hold,” Obama said.
But such calls for national unity are falling on deaf ears. The battle over the stimulus package has seen Obama’s early promise of uniting the country in the fight for economic recovery disappear. Michael Steele, elected last weekend as the first black chairperson of the Republican national committee, responded to Obama’s comments with a stinging attack of his own. He said ordinary Americans needed tax cuts, not wasteful spending by a Democrat-controlled government. “You have to wonder if all that power has gone to their heads,” Steele taunted on Saturday. “American families are doing their best to balance their own budgets and pay their mortgages. The fastest way to help those families is by letting them keep more of the money they earn.”
The next controversy is likely to break out on Monday, as details of yet another bank bailout are released. At the same time as Obama is hitting Middle America on behalf of the economic stimulus plan, his new Treasury Secretary, Tim Geithner, will give details of a renewed effort to rescue the financial system. In the face of a huge public backlash against the banking industry, such a move is likely to be politically explosive.
In his first major speech, Geithner is expected to detail how he will detoxify the US financial system. The rescue plan may see the US replicate a central part of Gordon Brown’s policy of insuring some distressed assets held by banks, though he is expected to be more radical by authorising the government to buy banks’ toxic assets and spending up to $100-billion to buy and modify troubled homeowner mortgages. There are suggestions that Geithner will expand the role of the state-sponsored mortgage firms, Freddie Mac and Fannie Mae.
About the only thing on which Republicans, Democrats and ordinary Americans now agree is the desperate state of the economy and financial system. That was highlighted by figures released on Friday, which showed the loss of almost 600 000 American jobs in January, the biggest drop in 34 years. — guardian.co.uk