Still Not Too Late For Obama To Get On The Right Path

Early this year a Democratic consultant sent me a memo on Democratic Party positioning based on polling and economic data. I ran across it by chance while I was trying to make sense out of the reports that President Obama's Grand Bargain that he had offered the GOP included something most rational people would interpret as "cuts" to popular core middle class programs like Social Security, Medicare and Medicaid (not to even mention public education, also under increasing threat).

The memo made clear that the upcoming elections-- for the presidency, for Congress and for state governments-- may well be determined on whether hard-pressed Americans in the middle class feel like Democrats are on their side. Voters who abandoned the Democrats in the 2010 midterms were from the working and middle classes most pressed by the economic trauma of the last few years. In 2008, voters who said they were worse off economically in the previous couple of years voted for Obama by 42 points, but in 2010, they voted Republican by 29 points. That 71 percent swing is gargantuan-- and it's why Boehner is Speaker and why the GOP is in a position to block everything progressives would like to accomplish in the House. According to recent polls, Obama's approval rating with these economically downscale, working-class independents’-- swing voters-- has remained flat. Yet, when you look at the key issues in the same polling that shows the Democratic Party in danger of being swamped by Obama's poor job approval numbers, you can't help but notice these voters back a progressive agenda-- far more so than an Obama agenda in fact. Findings from the Stan Greenberg poll done for the Campaign for America's Future found:

* Swing voters supported a message about challenging China on trade, ending subsidies to corporations that send jobs overseas, and stopping NAFTA-like trade deals over a message about increasing exports, passing more trade agreements, and getting government out of the way by 59-28

* Swing voters supported a message about ending tax cuts for those making over $250,0000 a year, adding a bank tax to curb speculative trading, cutting wasteful military spending and ending subsidies to oil companies over a message about cutting 100 billion dollars from domestic programs, raising the Social Security retirement age, and turning Medicare into a voucher program by 51-37

* Swing voters supported a statement about politicians keeping their hands off Social Security and Medicare over a statement about raising the retirement age by 62-36

* 89% of swing voters supported a statement about full disclosure of campaign donations and limiting the power of lobbyists

* 90% of swing voters supported a statement about cracking down on outsourcing and creating jobs by fixing schools, sewers, and roads in disrepair

* Even when framed in direct opposition to a statement about stopping increasing government spending and tax increases, swing voters said they were more worried that we will fail to make the investments we need to create jobs and strengthen the economy by 54-44

The Republicans are on the wrong side of every one of these issues. But where is President Obama? At best, unclear. When he addressed the nation about the dismal jobs numbers last week, he couldn't resist putting a plug in for immensely unpopular NAFTA-like trade agreements that he's promised to deliver for Big Business, the types of trade agreements he and other corporate politicians try selling as job creators when American voters see them as job destroyers. So whose side is he on? To voters focussing on that issue, he's just another Establishment political selling out to the big corporate donors who are so loathed by so many.

Obama didn't fight to end the Bush tax cuts for the wealthy-- at least not hard enough to make it happen. Obama didn't fight for any of these populist measures to curb Big Banks and Big Oil-- or if he did, he fought and failed (or didn't fight well or strongly). His positioning on keeping hands off Social Security, Medicare and Medicaid is muddled and confusing. Who's side is he on? It's impossible for an average voter to tell. It's impossible to miss where Bernie Sanders stands on the issue. Is he just a more effective communicator?

The swing voters who moved toward the Republicans in 2010 were mostly white, independent, working- and middle-class, older (seniors went from voting 8 percent for McCain to voting by 22 percent for Republicans in 2010), economically hard-pressed, and economically populist. They hate the biggest banks and tended to blame Wall Street for the economic crisis but still voted Republican-- 35 percent said Wall Street was mostly to blame for the economy, more than any other person or institution (and many of that 35 percent were white, working-class independents, because base Democrats blamed Bush and base Republicans blamed Obama), but those voters went Republican 56-42. They are wary of trade deals, hate outsourcing, and don’t like Big Business. They also hate deficit spending, big government, and government waste (they are swing voters, after all), but they sure don’t have any interest in cutting Social Security, Medicare, education, or infrastructure spending. Perhaps what they hate most of all is business as usual in Washington: lobbyists, special interests, corporate tax loopholes, sweetheart deals for government contractors. The reason they think government doesn’t work for them anymore is that the special interests have taken it over.

Obama seems to have made himself into a posterboy for everything these people hate. What's he's got going for him is how extreme the GOP is trending and how he looks reasonable and sensible compared to a party that has been captured by teabagging radicals. Obama and the Democrats running for other offices need to show both Democratic base voters-- many of whom sat out the 2010 midterms-- and the hard-pressed middle class that Democrats are on their side. Here’s how the memo suggested they should be talking about an agenda leading up to November, 2012:

1. Entrepreneurial populism. Both Democratic base voters and working- middle-class swing voters are angry at the powers that be: a government that never seems to get things done on their behalf; Wall Street mega-bankers who crashed the economy, demanded a bailout, and never showed a moment of remorse; a media establishment more concerned with trivia and sensationalism than with anything really important; and big businesses that ship jobs overseas and have their lobbyists cut sweetheart deals with the government. But a purely angry message going after bankers and tax breaks for the wealthy only brings Democrats into a 45-45 tie with an angry anti-government message from the Republicans. Americans right now are first and foremost very pragmatic, very focused on jobs and the things that will help them make it in tough times. However angry they are at the establishment, they want to be sure that politicians are focused on pragmatic policies that create more jobs and economic growth. Voters are looking for policies that help small-business entrepreneurs get investment capital and create more jobs; policies that help manufacturing companies, big or small, create jobs here in America; and policies that invest in the jobs of the future: infrastructure, R&D, green energy, technology. The winning political formula is what I call entrepreneurial populism: taking on the big Wall Street banks, the jobs outsourcers, and other powerful special interests on behalf of both the middle-class workers and the business innovators who want to create American jobs here and now. President Obama’s investment agenda is a good start, but it needs to be bigger and bolder in terms of job creation, and it would be far more powerful if Obama were taking on wealthy special interests who are keeping things from moving forward.

2. Emphasize job creation at every turn. President Obama and Senate Democrats should be pushing forward a new jobs bill practically every week: more infrastructure spending, more loans and grants to small businesses, more help for solar and wind companies, universal broadband. Whatever the policy is, the connection with jobs should be obvious and repeated over and over again. If the Republicans want to stand in the way on all these jobs bills, let them. If the fight in front of the public is about jobs, even if we lose on the Hill, we still win.

3. Stand up for homeowners in fights with bankers. The combination of the housing bubble and the worst recession since the Great Depression has resulted in a devastating foreclosure crisis. Millions of homeowners are facing foreclosure, and banks have been cooking their books, and presenting made-up paperwork and falsified affidavits in order to avoid helping homeowners keep their homes. Our economy has no chance of significantly improving if the housing crisis is allowed to continue. The government should implement a foreclosure freeze until they are able to sort through the mess that is the current mortgage title system. Additionally, it makes sense to push the banks, along with Freddie and Fannie, very hard to institute widespread mortgage write-downs that reflect current housing prices to underwater homeowners. This can be done without going to Congress, because the Obama administration has plenty of tools to pressure the banks to write down mortgages, and they actually control Freddie and Fannie right now. These policies would dramatically reduce the need for foreclosures and cut the stresses on our economy. Democrats need to counteract the daunting political power held by the big banks and side with the middle class.

4. Fight for the government programs that benefit the middle class. There are certain government programs that are overwhelmingly popular with the public, including with swing voters, because they benefit the broad middle class so much. Among them are Social Security, Medicare, student loan programs, and public education and infrastructure funding. For example, according to a variety of polls done over the last couple of months: 67 percent oppose spending cuts on health care or education; 56 percent oppose reducing the money spent on student loans; 64 percent oppose raising the retirement age for Social Security; 66 percent oppose any benefit cuts to Social Security and Medicare; 71 percent oppose cuts in federal aid to states for education or road building. And as people understand the health care law more and more, and start to take advantage of the benefits being phased in, they will be much more likely to support its funding as well. Obama and the Democrats should fight like tigers for all these programs, resisting Republican attempts to slash and radically restructure them.

5. Change Washington by taking on the special interests. One of the things that was clear from Democracy Corps and other pollsters in the last cycle was that in order for Democratic arguments on the economy to be taken more seriously, Democrats need to make clear that they have the courage to take on wealthy special interests and change the way government does business. For example, in a Sept. 20, 2010 memo, Stan Greenberg and James Carville laid out a series of Democratic frameworks for moving the election in the right way. They found in their testing that a message that leads with reforming D.C. and taking on the big money lobbyists, and then goes straight to a strong pro-middle class and pro-small business economic message was by far the most powerful frame for Democrats, moving voters a remarkable +9 points. As Stan and James put it:

"The respondents are a little skeptical of candidates who describe themselves as 'champions of the middle class,' but fighting for change in Washington, bucking privileges, being for small business and American jobs and against breaks for Goldman Sachs makes this an authentic claim.

6. Reform government contracting. The Center for American Progress, US PIRG, and other reform groups have estimated that the federal government could save enormous amounts of money ($100 billion annually or even more) simply by reforming the way they do government contracting. With more and more government services privatized, the amount of government contracting has been growing by leaps and bounds over the last couple of decades, and these contracts have been noted for the waste and corruption entailed in them. No-bid contracts, sweetheart deals, cost overruns, a lack of accountability for getting them done on time, easy to achieve bonus clauses written into most contracts, and special-interest language in appropriations bills favoring one firm over all others have generated enormous amounts of waste. By demanding reform of this process, Democrats could burnish our credentials in terms of cutting waste in government as well as opening up contracting to more innovative and efficient firms.

This kind of agenda-- populist in taking on the D.C. and Wall Street establishment and other corporate special interests, but clearly pro-jobs, small business and the middle class-- has appeal to both swing and working class voters and Democratic-base voters. Even if the economy remains flat for average Americans, which unfortunately is a distinct possibility, it creates a narrative in which the President and Democrats in Congress are clearly fighting for the middle class against powerful special interests.

That was sent to the White House and to Democratic Party leaders almost half a year ago. You tell me... have they taken these finding and suggestions seriously? One week ago former Labor Secretary Robert Reich described President Obama's forays into job creation as fluff and indicated that the White House still doesn't get it.

The President has to have a bold jobs plan, with specifics. Why not exempt the first $20,000 of income from payroll taxes for the next year? Why not a new WPA for the long-term unemployed, and a Civilian Conservation Corps for the legions of young jobless Americans? Why not allow people to declare bankruptcy on their primary residences, and thereby reorganize their mortgage debt?

Or a hundred other ways to boost demand.

Fluff won’t get us anywhere. In fact, it creates a policy vacuum that will be filled by Republicans intent on convincing Americans that cutting federal spending and reducing taxes on the rich will create jobs.

Most Americans are smart enough to see through this. But if the Republican snake oil is the only remedy being offered, some people will buy it. And if the President and Democrats on Capitol Hill continue to obsess about reaching an agreement to raise the debt limit, they risk making the snake oil seem like a legitimate cure.