How Obama Played an Inside Game in Washington

Though he campaigned as an outsider, Obama decided it was more important to try to change America than to try to change Washington.

Historic February 17, 2009 caption: "Obama signed a $787 billion economic stimulus bill into law on Tuesday as global markets plunged on fears that the recession would deepen despite government action in many countries." (Reuters)

It was a bit odd to hear President Obama declare last week that change only comes to Washington from the outside, because that's what he used to say -- before he spent the last four years trying to bring change to Washington from the inside. It's a compelling campaign trope, and it brought back memories of his primary victory over Hillary Clinton, because that was essentially an outsider-versus-insider fight. As I explain in my new book, The New New Deal, that fight helps explain the story of change during the Obama era, although not in the way Obama expected.

The 2008 Democratic primary was not about policy differences, with the partial exception of the war in Iraq, and it was not about new ideas. Obama and Clinton both ran on a conventional center-left agenda of reversing the Bush era, reviving the middle class, and investing in the future. Instead, Obama made the primary about political differences. He pounded his relentless message of Change, with that aspirational We Can Believe In addendum, the sense that maybe he would follow through on old ideas that never seemed to go anywhere. He turned Hillary's Washington experience and better resume into a liability, suggesting America couldn't afford another decade of Clinton wars and decrying the political pettiness and nastiness that exploded during the Clinton era as the fundamental obstacle to fundamental change.

Hillary's one-word explanation for the persistence of the status quo was "Republicans," the intransigent ideologues who had impeached her husband and blown his surpluses on tax cuts for the rich. Obama's one-word explanation was "Washington," the endless spin cycles, insult industries, and poll-tested platitudes that made tough choices and commonsense compromise impossible. As a symbol and a participant, Hillary was inextricably linked to that Washington gridlock machine, the bickering and parsing, the eternal boomer-driven relitigation of the sixties. The case for Hillary was that she knew how to fight Republicans, that she was comfortable in the muck. The case for Obama was that he could move politics beyond the muck, that he could bring the parties together to do big things, not just Clintonian school-uniform smallball.

It turned out that it was possible to make progress on long-term problems even while Washington remained distracted by the petty and the trivial.

That said, Obama's ideas about changing politics were always a means to the end of changing policies. The press never paid much attention to his agenda -- partly because it was a familiar agenda, partly because his race, his crazy pastor, and the attack ads comparing him to Paris Hilton made for sexier copy. But he made it clear on the day he announced his candidacy in Springfield in February 2007 that he was running to solve four perennial crises that the Beltway had failed to fix: our addiction to fossil fuels, our dysfunctional health-care system, our inadequate public schools, and an economy that wasn't working for ordinary families. He simply argued that real solutions to these intractable problems would be impossible until Washington could move beyond the noise and the rage. This is how he put it in Springfield:

What's stopped us from meeting these challenges is not the absence of sound policies and sensible plans. What's stopped us is the failure of leadership, the smallness of our politics -- the ease with which we're distracted by the petty and trivial, our chronic avoidance of tough decisions, our preference for scoring cheap political points instead of rolling up our sleeves and building a working consensus to tackle big problems.

That was the essence of Barack Obama's case against Hillary Clinton.

And it was wrong.

It turned out that it was possible to make progress on long-term problems even while Washington remained distracted by the petty and the trivial. Obama proved it during his first month in office, when he passed his $800 billion stimulus bill through the same broken political process he had decried on the campaign trail.

The stimulus would not only help prevent a second Great Depression, it would make a dramatic down payment on Obama's campaign promises to reform energy, health care, education and the overall structure of the economy -- without any working consensus or any pause in the scoring of cheap political points. It launched a green revolution, pouring a mind-boggling $90 billion into clean energy, doubling renewable electricity while making unprecedented investments in energy efficiency in every imaginable form, the smart grid, advanced biofuels, electric vehicles, and the factories to build all that green stuff in the United States. It's dragging our medical system into the digital age with unprecedented investments in health information technology. It created Race to the Top, the most ambitious education reform in decades. It also included the most aggressive infrastructure spending since Eisenhower, the biggest middle-class tax cuts since Reagan, the biggest infusion of research dollars ever, and much, much more. It was the purest distillation of what Obama meant by Change We Can Believe In.

All that change came from the inside. Obama took office during an economic emergency, but as Hillary could have predicted -- and many of the other Clinton Administration veterans who joined the Obama team did predict -- Washington Republicans adopted an all-out strategy of obstructionism from the start. I document in my book how Senate Minority Leader Mitch McConnell and House Minority Whip Eric Cantor plotted their strategy of No before Obama even took office. They understood that after Obama's lofty promises of post-partisan cooperation, Republicans could turn him into a promise-breaker by refusing to cooperate.

Obama decided it was more important to try to change America than to try to change Washington, and he understood that bills that don't pass Congress don't produce change. So he sent his chief of staff, Rahm Emanuel, and his vice president, Joe Biden, to Capitol Hill to try to round up the votes he needed to pass a stimulus. It wasn't a pretty process, and with Rahm involved, it wasn't really suited for young ears. The White House had to cut some unpleasant deals to round up a filibuster-proof 60-vote majority in the Senate. But it secured one of the most important and least understood pieces of legislation in U.S. history.

That 60-vote requirement in the Senate has driven the arc of the Obama narrative. It's the reason Obama's health-care reforms didn't include a public option (he didn't have the votes) and did include the notorious Cornhusker Kickback (he needed Nebraska senator Ben Nelson's vote). It shaped the president's Wall Street reforms, too. Playing the inside game has taken a political toll; one poll found the percentage of Americans who believe the stimulus created jobs was lower than the percentage who believe Elvis was alive, even though independent economists overwhelmingly agree the stimulus helped make an awful situation less awful. In the end, though, the inside game worked. Obama did the big things he said he was going to do. It was only after the Republicans reclaimed the House in 2010, making new legislative achievements impossible, that Obama embraced the outside game, pushing a doomed American Jobs Act to highlight GOP obstruction.

In the 2008 campaign, Obama had argued that substantive change would be impossible without political change. But after the financial system imploded and he had to act immediately to rescue the economy, he didn't see any way to change Washington overnight. Instead, he proved that it was possible, though extremely difficult, to produce transformational results through transactional politics. "The campaign was conducted in America, not in Washington," David Axelrod told me. "The ability to change the dynamic up there was a lot more difficult."

Now that he's a candidate again, Obama is trying to bring back his old outsider message, the nutty-Washington themes of yesteryear. But he's an insider now, an unusually effective one. It's a testament to the enduring nuttiness of Washington that he has to pretend otherwise.

This post is adapted from Michael Grunwald's The New New Deal: The Hidden Story of Change in the Obama Era.