In this piece Steve Coll identifies what he believes to be the two major policy demands facing the new administration:
by Steve Coll November 10, 2008
In 1934, President Franklin Roosevelt asked Frances Perkins, his Secretary of Labor, to draft a plan that might help Americans escape poverty in old age. “Keep it simple,” he told her. “So simple that everybody will understand it.” On August 14, 1935, after bargaining in Congress, Roosevelt signed the Social Security Act at a White House ceremony. The law “represents a cornerstone in a structure which is being built but is by no means complete,” the President said. He continued:
Roosevelt hoped that the elderly would also receive health insurance; Congress balked. It took thirty years—until July 30, 1965, when Lyndon Johnson signed the Medicare bill—to protect older Americans from the ravages of sickness as well as poverty. These were Democratic initiatives, but they gradually became national compacts: Ronald Reagan defended Social Security, and George W. Bush expanded Medicare. They, too, came to recognize that a sound system of social insurance enabled by government makes capitalism and its splendid innovations (the iPhone, the Cartoon Network, the Ultimate Fishing Tool, etc.) more balanced and sustainable.
Last week, the Department of Commerce reported that the economy is shrinking. Almost certainly, the United States has entered its twelfth official recession since Roosevelt’s death. Most of the past eleven recessions have been short and mild, in part because of the “automatic stabilizers,” as economists call them, created by New Deal-inspired insurance and regulatory regimes. The current financial crisis, however, has already proved so severe and so volatile that it has smashed or bypassed a number of important shock absorbers. Some economists fear that this downturn may therefore be atypically long and painful.
The country is fortunate in one respect: the sudden buckling of financial safeguards has put just about everyone in touch with his inner New Dealer. Even Alan Greenspan recently confessed to Congress a crisis of faith in self-regulation. Meanwhile, former free-market true believers in the Bush Administration have tossed out money from the public vault like looters, and just as untidily; if they can sort out exactly what they have done, the Treasury’s mandarins must soon prepare PowerPoint presentations to document for their successors the most expansive nationalizations undertaken in the United States since the Second World War. The Administration seems giddy with a discovery familiar in the palaces of certain despots: yes, you can just print the bills on your own presses and hand them out to your friends.
Embedded in this festival of emergency measures, however, is an important and possibly durable ideological shift. Last week, in an op-ed in the Washington Post, Martin Feldstein, the chairman of the Council of Economic Advisers in the Reagan Administration, and, more recently, an adviser to John McCain, endorsed large-scale spending on public works as a way to stimulate economic recovery. This was a bit like Al Gore embracing coal. The essay’s appearance indicated that a broad coalition is emerging, where none existed a year ago, in favor of New Deal-style expenditures on roads, bridges, broadband lines, alternative energy, and the like, to support economic recovery and future growth. Such investment could strengthen the economy for a generation, as Eisenhower’s Interstate Highway System did.
It’s not enough, of course, just to be like Ike. The campaign of 2008 was notable for its misleading narratives about how Presidents are tested. From the wacky competition over 3 A.M. phone calls to McCain’s alleged campaign suspension, it was suggested repeatedly that Presidents are best measured by their day-to-day crisis-management skills. Of course, sound judgment under pressure is essential to a successful Presidency, and its absence can prove disastrous (see Bush, post-Afghanistan; see Bush, post-Katrina). Coolheadedness on its own is sometimes enough to earn lasting gratitude (see Kennedy, Cuban missile crisis). Yet, great Presidencies can arise only from great causes. To define them and deliver on them is the truer test of the officeholder.
The next Presidency has within its reach at least two generation-spanning causes: the need to jump-start a new energy economy, and, in so doing, help to contain climate change; and the need to enact a plan to provide quality health care to all Americans, and, in so doing, complete the project of social insurance that Roosevelt described in 1935. Each of these projects is urgent, but it is health-care reform that speaks more directly to the economic and human dimensions of the present downturn.
The accumulating failures in the country’s health-care system are a cause of profound weakness in the American economy; unaddressed, this weakness will exacerbate the coming recession and crimp its aftermath. A large number of the country’s housing foreclosures in recent years appear to be related to medical problems and health-care expenses. American businesses often can’t afford to hire as many employees as they would like because of rising health-insurance costs; employees often can’t afford to quit to chase their better-mousetrap dreams because they can’t risk going without coverage. Add to this the system’s moral failings: about twenty-two thousand people die in this country annually because they lack health insurance. That is more than the number of Americans who are murdered in a year.
Presidents who help right a wrong of this character are generally immortalized in granite, but to succeed they require a transformation-minded Congress, too. The next Congress will likely be without the active leadership of its great lion of social reform, Ted Kennedy. There is only one senator with the wonky expertise, work habits, and political stature to fill Kennedy’s place: Hillary Clinton. The psychology she would bring to this inheritance would surely be complex, but no health-care-reform bill will pass without her. Lyndon Johnson, also a person of complex psychology, understood this politics of legacy well. At the Medicare signing ceremony, he invited Jimmy Roosevelt, F.D.R.’s eldest son, and the aging Harry Truman, who had pushed hard for health-care reform, to share the glory. Johnson, in his remarks, linked them (and himself, of course) to the Social Security Act and its “illustrious place in history,” and he carefully recited an “honor roll” of fifteen congressional leaders who contributed to the bill’s passage. It was, Johnson said, a “time for triumph.” It is, even more so, today. ♦