Barack Obama's audacious agenda of stimulus, reform, and regulation will shake up every business and industry
So much for the first 100 days. In fact, one might ask, when exactly did the first 100 days start?
For President-elect Barack Obama, who steps into the Oval Office as the country faces its most tortured economic climate since the Great Depression, the task of getting down to business started well before his official Jan. 20 inauguration. For weeks, he and top advisers have criss-crossed the capital outlining plans for a massive stimulus plan aimed at jump-starting the economy. They have also plunged deep into negotiations with the Treasury Dept. and Congress over how to reformulate the financial rescue program and gear it more towards helping struggling homeowners. As a result, soon after the inauguration Congress will likely release the final $350 billion installment of the government's big financial system rescue, the Troubled Asset Relief Program or TARP.
But forget the current headlines for the moment, and take in the sheer scale of Obama's ambitious agenda. Since his election, Obama has shown little sign of backing away from his big, costly plans to reform health-care coverage, tackle the enormous energy and environmental challenges the country faces, or refashion a creaking regulatory system in financial services to bring government oversight into the 21st century.
Or consider the hundreds of billions of dollars he's now committing to infrastructure spending, individual and business tax cuts, and aid to bail out struggling states—all of which will generate trillion-dollar-plus budget deficits for years to come. Talk about the audacity of hope. While fiscal conservatives flinch, Obama makes the following pitch with his trademark zen cool: Not only can the country afford to tackle several big issues at once—it cannot afford not to.
For business leaders there is now a vastly different political environment in Washington to navigate. Executives will have to adjust to a whole new cast of players, as a new array of issues comes to the fore. With the new Administration promising the most activist government in decades, the potential impact on virtually every industry in the country is enormous. "Washington will be a center of the business universe for many years to come," says Stanley Collender, a managing director of Qorvis Communications, a Washington-based public affairs firm.
Some observers wonder if Obama's team is trying to tackle too much at once. "If you think about all that's going to happen, it's a bit like a stack of pancakes: you've got housing, autos, finance, infrastructure to deal with all on top of one another, and that's before you start throwing on health care or trade issues or 14 other things that will arise," says Thomas J. Donohue, president of the U.S. Chamber of Commerce. The question, he adds, is whether the stack "will crater under its own weight."
There is much anticipation over what Obama and his team will officially set out to do once their first 100 days actually start. Flush with the victory they helped Obama and congressional Democrats achieve, their allies in labor pushed to put the passage of a law making it easier to unionize high on the list of priorities. Business groups led by the Chamber, pushed just as hard to keep it off the early agenda. Others have urged Obama to move swiftly on health care, fearing his window to muscle through big policy changes will be brief.
Clearly, the major early effort will be to craft a nearly $1 trillion stimulus plan to revive the economy and see it through Congress. Pulling that off will be extremely tough, given that every lobbyist and interest group in Washington and a whole army of economists, policy experts, and pundits have widely divergent ideas about how that money should be spent. "They have a hard slog ahead narrowing all these ideas down and getting an agreement," says Daniel Clifton, the Washington policy analyst for institutional broker Strategas Policy Research.
Assuming the stimulus battles don't bog down the new Administration, Obama will pursue other policy agendas. One clue to watch for: When the Administration releases its budget around late February, it will offer its first clear hint of how fiscally constrained it will be in going forward with other programs. Energy lobbyists think the Administration could begin by spring to outline its big energy and environmental plans. They will almost certainly include a cap-and-trade system to control carbon emissions, but the difficulty and costs of designing a system mean no action is likely until later in the year.
Much the same time frame is likely on the Administration's other signature project: the push to expand health care. By late spring both the Administration and congressional Democrats will offer up more detailed proposals. And the real skirmishes will begin.
Of course, it wouldn't be Washington if there weren't a donnybrook over taxes. For now the issue is being downplayed because of the economic crisis. But that will change. With the estate tax set to go to zero next year and most of the remainder of the Bush income and capital-gains tax cuts expiring the following year, Congress and the Administration will probably begin debate over how to overhaul individual and corporate rates by the fall.
It all adds up to perhaps the busiest time in Washington in decades. Which explains why, for all of Obama's anti-lobbying rhetoric, Washington will be more packed with lobbyists than ever before: Rarely have so many crucial issues for business been up for grabs.
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Did FDR Spend Too Little?
Was the New Deal a failure? That's what conservative pundits say, pointing to the deep 1937-38 recession. Yet in his new book, Nothing to Fear: FDR's Inner Circle and the Hundred Days that Created Modern America, Adam Cohen of The New York Times makes the case that it was actually Franklin Delano Roosevelt's decision to cut back spending on public works and other programs that precipitated the downturn.
To listen to an interview with Cohen, go to http://bx.businessweek.com/obamas-stimulus-plan/reference/
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