Can Anyone Transplant a Spine into Obama to Kill Citi’s Bailout Bill?

By William K. Black
Bloomington, MN: December 12, 2014

President Obama is a terrible negotiator and if Senator Warren and Representative Pelosi are unable to save him from himself he will effectively end his presidency as even an episodic force for good.  Yes, the Republican legislators will have more power in Congress next month.  Obama’s justification for supporting the odious omnibus budget bill is avoiding that danger.  No, the fact that the Republican will take control of both houses in January does not mean that Obama would be forced into approving an even worse budget bill next year.

Obama needs to do three things to succeed in the negotiations.  First, state they he will sign only a clean bill that has nothing in it other than the spending authorization.  Second, veto anything other than a clean bill.  If the Republicans want to force the U.S. government to shut down so that they can deliver special favors to the five largest U.S. banks (that’s what the current bill that Obama is urging Democrats to agree to does), then they can do so.  If Obama does not blink, the Republicans will lose and look terrible in the process because their actions are indefensible.  Third, pound away at indefensible portions of the Republican demands such as the giveaway on derivatives to the five biggest banks.  The Republicans have presented Obama with a Christmas gift by making their policy demand a policy surrender to the five largest banks.  Note that the surrender is so unprincipled that no Republican is publicly supporting the case for gifting the five largest banks with a promise to bailout their future financial derivative losses.  With luck, Obama’s opposition would smoke out Citicorp, which drafted this giveaway, and lead the big banks to attack Obama.  That would be a second political gift just before Christmas.  An element of this strategy is rallying Congressional Democrats to forcefully and publicly oppose such subsidies to the banks.  That opposition might cost them some campaign contributions, but it would greatly add to public support for the Congressional Democratic stalwarts.

If Obama gets his way and surrenders to the Republicans on the legitimacy of using bills on other matters to extort Obama and the Democrats into passing obscene provisions like the gift to the Big Five banks that trade virtually all the derivatives, then the Republicans will have for the remainder of Obama term in office a strong Congressional majority, leverage, and the certain knowledge that they are negotiating with someone with rounds heels who falls over when pushed.  They will subject him to the death of ten thousands cuts.

The Republicans now have joint responsibility for the government.  The people of the United States, even those that purport to hate our government, discover when the Republicans shut it down that they actually need and want a government and large numbers of people become hostile to the Republicans.  Obama needs to practice saying the word “no” and then making it clear through his actions that “no” means “no.”

Warren and Pelosi are trying hard to save Obama, their Party, and our Nation.  It is bad enough that they have to confront the Congressional Republicans.  It is unconscionable that they have to stop a White House run by invertebrates from committing reputational and policy suicide.

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