Why House Democrats Are Scared (and Obama Isn’t)

Barack Obama will stand for re-election in 2012, while the 254 Democrats in the House of Representatives will next face the voters in 2010. There will be friction.

For House Democrats, whose ’10 campaigns will succeed or fail based on the public’s confidence in Obama, it’s essential that voters feel the economy is improving —significantly — by Election Day. The White House, though, is free to take a slightly longer view. Sure, Democratic losses in ’10 wouldn’t be helpful, but for Obama, the real target date is November 6, 2012.

These conflicting senses of urgency are now coming into focus. On Tuesday, House Speaker Nancy Pelosi told the press that she might be receptive to a second stimulus bill, to supplement the $787 billion package passed by Congress last month. David Obey, her loyal lieutenant and the chairman of the Appropriations Committee, then announced that his staff was already at work on a follow-up stimulus program (although he made clear that there are no imminent plans to formally introduce it).

Pelosi and Obey and many of their Democratic colleagues are acting on fears that the first stimulus bill, watered down by compromise, won’t be adequate to get the job done—an argument that New York Times columnist Paul Krugman has been advancing, and one that was impressed on Pelosi and other top Democrats in a meeting with economists on Tuesday.  

By this line of thinking, the current stimulus will have only a marginal impact on the economy, creating or saving—under the best-case scenario—3.5 millions jobs. With more than four million jobs already lost and 610,000 disappearing last month alone, this would probably leave unemployment at or near 10 percent at the end of 2010.

For House Democrats from potentially competitive districts, this is a particularly unnerving prospect. Surely, the example of 1982, when unemployment crossed 10 percent at the end of September and voters responded by throwing out more than two dozen of Ronald Reagan’s Republican allies in the House, has crossed their minds. If the forecasts of Krugman and his colleagues are accurate, then losses—possibly severe losses—for Democrats in next year’s midterm elections will be almost unavoidable.

And while their party’s majority is too big to be threatened in ’10, even safe-seat Democrats have reason to dread Republican gains, which would make it much easier for the House G.O.P. to slow the Democrats’ agenda in 2011 and 2012 and which could bring Republicans within striking distance of control of the chamber in the ’12 elections.

It’s not surprising, then, that House Democrats are increasingly agitating for a second stimulus, one that (in theory) would supplement the original with millions of new jobs—enough to convince the country by the fall of 2010 that Obama’s economic policies are working and to stifle any popular sentiment that it’s “time to send the president a message.”

But the odds aren’t good that they’ll get their way, mainly because the White House doesn’t see a second stimulus as a fight worth waging.

Any new stimulus, the administration realizes, would face far more opposition than the first one, which was passed with almost no Republican support (and even a handful of Democratic defections). The first time around, voters were willing to ignore the G.O.P.’s feigned outrage over explosive spending, mainly because they grasped the severity of the situation, believed in Obama, and wanted the new president to get his way on his first major initiative.

The dynamics would change in round two. Republicans would find the public far more receptive to their spending attacks—particularly after absorbing the recent uproar over the earmark-happy omnibus spending bill and especially if the administration seeks more bailout money. Obama’s push for a $3.7 trillion budget filled with tax hikes and new spending programs won’t help either. To ask for a second stimulus on top of all of this would invite moderate-to-conservative deficit hawk Democrats in the House who went along with the first one to break with Obama—both for philosophical reasons and to curry favor with their swing district constituents.

Beside the budget fight that will bog him down for the next few months, Obama is expected to unveil a comprehensive plan to address the banking system. And he also wants to make health care legislation a priority. All of this will require a considerable investment of time, energy and, most importantly, political capital.

This probably explains why Robert Gibbs, Obama’s spokesman, had this to say about the second stimulus idea this week: “The president and his economic team believe that the steps we took will have a concrete impact on getting our economy moving again. The focus throughout this administration is doing all that we can to move the spending that’s been authorized by Congress.”

Maybe Obama, in his heart of hearts, would like to have a second stimulus (or would simply have liked the first one to be much bigger). But he doesn’t want to subordinate the rest of his ambitious agenda to what would be a draining and costly fight over another stimulus. Better to take what we got, work on the budget, and hope the banking plan—when it’s finally announced—gets the markets moving again, seems to be the White House’s way of thinking.

Like House Democrats, Obama and his team are probably mindful of 1982 as well. Sure, Reagan’s party paid a price for the awful economy in those midterms, but when the economy turned around in 1983 and 1984, it was Reagan who reaped all of the political benefits.