In 2011, Treasury Secretary Tim Geithner was instrumental in guiding President Obama away from rejecting a deal with Republicans on increasing the debt limit. Geithner was almost alone, the adult in White House discussions on handling GOP demands. The president and his other advisers had political and ideological misgivings about a deal. Geithner’s concern was bigger. He feared an economic collapse.
In February, Obama and Republicans will face a new struggle over the debt limit. The president says he won’t trade spending cuts for an agreement to raise the limit, as he did two years ago at Geithner’s insistence. Indeed, he says he won’t negotiate with Republicans, nor will his aides. He’s stamped his foot and laid down the law. No deal.
This time, Geithner won’t be in a position to restrain Obama. He’s stepping down as Treasury secretary, and last week White House chief of staff Jacob Lew was nominated as his successor. Lew is no Geithner. An economist, Geithner was president of the New York Federal Reserve—a financial post of enormous importance—before becoming Treasury chief. Lew is a Democratic apparatchik who’s spent 30 years working for Tip O’Neill, Bill Clinton, and Obama. He’s a professional subordinate.
The switch at the Treasury Department and the bluster of Obama give us a preview of the president’s second term. Obama isn’t quite out of control, but he’s getting close. Reelection has not only emboldened him, it’s also prompted him to mock and belittle Republicans. “If anything, he’s becoming more, not less, polarizing,” says Peter Wehner, a former presidential adviser to George W. Bush.
In December, Obama threatened House speaker John Boehner he’d use his Inaugural Address and State of the Union speech to blame Republicans if they didn’t knuckle under on the fiscal cliff, which they did. A few weeks later, he declared at a White House event that Republicans have “another thing coming” if they expect an accord on deficit reduction in 2013 to rely heavily on spending cuts. “We don’t have a spending problem,” he told Boehner, only a “health care problem.” Meanwhile, he’s increasing health care spending, not curbing it.
In his new cabinet, the president will have no one with independent stature to pacify him. Defense Secretary Leon Panetta, a highly regarded figure in Washington for more than two decades, is being replaced by former Republican senator Chuck Hagel, assuming he wins Senate confirmation. Hagel is a lesser figure. Obama’s choice as CIA director, John Brennan, lacks the credentials of his two predecessors, General David Petraeus and Panetta. And the president’s next chief of staff is sure to lack the Washington standing of his first chief, Rahm Emanuel, now mayor of Chicago.
This bodes conflict, not compromise. Republicans who met with Lew in negotiations over the debt limit and fiscal cliff found him to be highly ideological, obstinate, and utterly impervious to their pleas for spending cuts and entitlement reforms. And Obama must have liked Lew’s performance, because he’s promoted him.
With the debt limit looming, is Lew going to tell the president he’d be wise to accept Republican spending cuts to get the debt ceiling raised, as Geithner did? Not likely. Even if Lew did, would he have enough influence to get Obama to go along? Maybe not.
And in a pinch, would Lew deliver the kind of apocalyptic warning that Geithner did? “We’ve lived through government shutdowns,” Geithner told Obama, according to Bob Woodward’s account in The Price of Politics. “It’s one thing to have a government shut down. It’s another thing to have an economy shut down.”
Nor should we expect Hagel or Brennan or anyone else in Obama 2.0 to tell the president what he doesn’t want to hear. Speaking truth to power or simply delivering a few morsels of bad news is not a trait associated with yes men.
Besides, as Obama demonstrated in his reelection campaign, he is loath to buck Democratic interest groups. “To do a bipartisan deal a president must be willing to challenge (or ignore) his political base,” notes former director of Bush’s National Economic Council Keith Hennessey. “Obama did that on the Afghanistan surge [in 2009]. That’s it. And you can’t just sit back and hope that a bipartisan deal will fall in your lap. You have to proactively challenge your party to make it happen.”
Obama isn’t proactive in that way. On Meet the Press in late December, David Gregory asked the president if the “leadership falls on you” to reach a bipartisan deal—in this case, a fiscal cliff deal. Obama ducked the question. In truth, he doesn’t accept the responsibility that when all else fails, he, as president, must be the ultimate dealmaker.