News Compass

Thursday, October 30, 2008

The Obama Presidency: Getting Up to Speed for the Challenges

Read here in Financial Times

Washington’s best-kept secret is that Barack Obama has the largest and most disciplined presidential transition team anyone can recall.

Headed by John Podesta, former chief of staff in Bill Clinton’s White House, it started work well before the financial meltdown hit in September but has been swamped by its implications ever since.

Transition insiders, who are under strict orders from the Obama campaign not to talk to the media to avoid giving the impression Mr Obama thinks he has won already, contrast it particularly with Mr Clinton’s transition in 1992, which was based in Little Rock, Arkansas, and turned into an extended symposium on every subject under the sun.

“Clinton’s transition didn’t really begin until after he’d won the election,” said someone who is helping Mr Obama’s transition and worked on Mr Clinton’s. “But the scale of the challenges facing a potential Obama administration means that it is much, much more important to be prepared this time round than it would have been in 1992.”

One of Mr Obama’s main motivations is to avoid the mistakes attributed to Mr Clinton, whose first 100 days in office turned into a nightmare from which it took years to recover and which helped bring about the Republican landslide in the 1994 mid-term elections.

Mr Clinton spent his first few weeks choosing a diverse cabinet that “looked like America”, which ate up time that could have been spent deciding on legislative priorities and appointing the main White House staff who ensure an administration runs smoothly.

In contrast, Mr Obama, who would instantly be faced with questions about how and whether to interact with the global financial crisis summit that George W. Bush has convened for the week after the election, is focusing on the “nitty gritty” of how things should work, says another person involved with the transition.

The Democratic nominee has already reached an agreement with Harry Reid, the Democratic Senate majority leader, to speed up the often painstakingly slow Senate confirmation process for the hundreds of appointees who would populate an Obama administration. Many of Mr Clinton’s appointments were still to be confirmed a year after he took office.

Mr Obama has also already had conversations with “blue dog Democrats” – fiscal conservatives – about the potentially painful budgetary decisions he would have to make well before taking office on January 20.

“The level of detail that the Obama transition team is getting into is extraordinary – they are leaving no stone unturned,” said a senior former Clinton administration official who has been consulted. “I have been getting calls that you’d expect in previous transitions to get maybe in December, or never at all.”

Were he to be elected, Mr Obama would face four immediate problems of a magnitude that would put previous transition efforts into the shade. The first is when to push Congress to enact a second fiscal stimulus to shore up the economy, and whether to shoehorn Mr Obama’s promised long-term investments in healthcare, energy, education and infrastructure into that package.

In 1992, the Clinton team was consumed by a battle between Bob Reich, future Labour secretary, who argued for redeeming the campaign’s spending promises, and Bob Rubin, future Treasury secretary, who argued for deficit reduction. Mr Rubin won. A similar debate is now taking place within the large universe of Obama policy advisers. “No decisions have been taken on anything yet,” said one.

The second is how to redeem Mr Obama’s promise of a rapid withdrawal of troops from Iraq. This could be complicated by the stalemate in negotiations between Baghdad and Washington over the “status of forces agreement”. Robert Gates, who many believe would be asked by Mr Obama to stay on as Pentagon chief, has sounded the alarm about the negotiations.

“President-elect Obama could be faced with a situation on New Year’s Eve where US troops are not permitted to leave their barracks because there is no legal basis for their presence in Iraq,” says Bill Galston, a scholar at the Brookings Institution, who was involved in Mr Clinton’s transition effort. “To game out all these scenarios – the financial crisis, Iraq, the fiscal stimulus, etc – will require an unprecedented degree of planning for a transition effort.”

The third and fourth decisions would be how to handle the financial meltdown and prepare the first budget, to be launched in February. With a projected budget deficit next year of $900bn, according to the transition team’s internal numbers, the Rubin-Reich battle could be replayed on a far grander scale.

“Even a few weeks ago nobody anticipated how much we would be swamped by the financial crisis,” says another insider. “It trains the mind on what our priorities should be.”

Mr Obama would be expected to announce his top three or four names, including a chief of staff, within days of being elected. “There would be no time for drift,” says Mr Galston.