Obama Time

Just a subjective view--but I think Obama has only until the end of the fall to pass any major domestic initiatives for his first term.

With the U6 unemployment rate teetering at 16.5% and auto industry layoffs to push that number further up, 20% unemployment represents a Depression. The American people will not blame Obama for any of the country's economic woes until next year but Republican concerns about deficits will begin to gain traction earlier. Now that Obama has put the public option back on the table for health insurance reform Republican resistance to a bipartisan solution has hardened. Obama is right, health care reform has to be implmented by fall or it will never happen. The lobby armies are out now in full force to preserve the interests of the health industry. Recent e-mails from the White House to the Obama internet army and his call for Democratic leaders to pow-wow at the White House on health care reform indicate the Administration is readying for the power move soon.

Polling data also suggests over 2/3rds of the public are very favorably disposed to immigration reform, with the numbers polling in the 80% if one includes tighter frontier controls and English-first programs. The Administration would be wise to move on this score as soon as possible since this is a big winner for the Democrats.

The Employee Choice Act, with tinkering, can and should be passed within the next six months or it too will no longer be possible.

The Administration has to be very careful about making any concessions on Social Security, one of the most successful programs ever embarked in the United States. Basically, the program with full benefits can be sustained with very modest tax hikes in the upper income brackets.

No doubt the economic powers-that-be would like the regulatory framework for the banks and the SEC to be put in place so the rules of the game are known. Whether this is politically possible given current trilateral issues between Republicans, Yellow Dog Democrats and more liberal Democrats remains to be seen.

But after that, the window for any significant changes will diminish as both parties look to the 2010 elections and the Obama Administration will have to make sure its policies are creating the employment numbers it promised. Remarkably for a near Depression situation, concerns about the deficit and funding the deficit will take centerstage next year. Could you imagine FDR in the depths of the Great Depression having to worry about such a thing?