How Obama Overreached on Health Care Reform

Someone must have misinformed Barack Obama when he ran for president that the U.S. Constitution allotted him only a one-year term, rather than four years. Otherwise it's difficult to understand why, faced with solving a Depression-size economic crisis, two wars, and global warming to boot, he felt that he also had to grab hold of the third-rail issue of health care during his inaugural year.

It's been a disaster, of course, and may go down as one of the biggest political miscalculations in modern history. For the American public—haunted by too many rounds of layoffs, appalled by Wall Street's government-aided Grand Heist, aghast at the size of federal spending that never seems to find its way into their pockets—health care was simply an intervention too far. Cue the tea partiers—and one freshly minted senator and future Republican rock star, Scott Brown. Lay poor Teddy Kennedy to rest all over again.

There was nothing new about this, of course. It falls into the age-old annals of hubris, the same excess of pride that got Achilles and Agamemnon in trouble with the gods. Obama apparently did buy into the idea that he was a Man of Destiny and, being one, possessed bottomless supplies of political capital. But he really had no more political capital than any first-year president, and he was straining his reserves just dealing with the stimulus and financial reform, much less fixing Afghanistan.

I first became worried about this bridge-too-far problem last year while covering financial reform on the Hill, when various congressional staffers told me their bosses didn't really have the time to understand how the Wall Street lobby was riddling the legislation with loopholes. Health care was sucking all the oxygen out of the room—and from their brains, the aides said. Obama and his team seemed barely focused on transforming the financial system—except now, belatedly—and left a lot of the infighting to regulators like Gary Gensler, the chairman of the Commodity Futures Trading Commission. Obama had spoken admiringly of Ronald Reagan as a transformational president. And yet at what would seem to be a similar historical inflection point—what should have been the end of Reaganite free-market fundamentalism and a laserlike scourging of Wall Street—Obama seemed to put this once-in-a-lifetime task on a back burner.

It is only now, a year later, when he has a terrific fight on his hands over health care, that Obama is talking about seriously breaking up the structure of Wall Street. The big-bank lobby will dig in big time of course, and seek to buy everyone it can on Capitol Hill, which means that the president will need even more political capital that he no longer has.

Just as bad, when the president did do health care—whatever version of it squeaks through now—he seemed to be getting such a meager result for so bruising an effort that it will be a long time before anyone has the stomach to set it right legislatively.

All is not lost, of course. We're barely out of January, and the good thing about hubris is that no one is immune to it. If Obama is lucky, the Republicans this year will emulate the Gingrich revolutionaries of 1994 and dramatically overreach themselves. If you recall, Newt Gingrich, too, in that era seemed to see himself as a Man of History and Bill Clinton as an afterthought. After sweeping to victory in the midterms, Gingrich was supremely self-confident that his party's decisive takeover of the House represented a broad shift and a mandate for drastic cuts in spending and a balanced budget. Well, not quite. After Gingrich publicly threatened that the U.S. might have to default on its debt for the first time in its history if he didn't get exactly his way (his precise cuts), he lost the public. And the Comeback Kid won the next election big time.

And then Clinton got a little too confident about the doings in his private office.

Pride is bipartisan, and so is the fall it goes before.