Since the transition team arrived in Washington, DC, the “No Drama, Obama” motto of the presidential campaign has been replaced by a good old-fashioned leaking operation. Over the last week, aides have been embarrassed into admitting to the veracity of several rumoured appointees including archrival Hillary Clinton for Secretary of State and New York’s central banker, Tim Geithner, for Treasury Secretary.
While these reports have given talking heads and columnists plenty to comment on, the more interesting question is what Obama’s new team will do with their power. Obama promised a multitude of policies on the campaign trail but the reality of office, the scarcity of Congressional time, and the backdrop of a spluttering economy mean that Obama will have to pick his priorities carefully.
There seems little doubt that an economic stimulus package will be the centrepiece of his first days in office. Economists such as Nobel Prize winner Paul Krugman are advocating a package amounting to 4% of GDP or roughly $600 billion. Lawrence Summers, the man who will head up Obama’s White House economics team, has said that government expenditure should be “speedy, substantial and sustained.”
There is already a consensus among Democrats as to what this package should include. Some cash will be spent on the much fêted middle class tax cuts and on breaks for small businesses. There will be sizeable expenditure on long overdue repairs to roads and schools. Local states – struggling to meet their balanced budget rules – will be helped out so that they can avoid cutting services such as healthcare for the poor.
Obama has promised a green revolution with a new “Apollo mission” to create oil independence within 10 years. But don’t expect legislation any time soon on a cap-and-trade scheme to reduce carbon emissions. Early green measures are likely to be all carrot and no stick with incentives for renewable energy production and improvements to the energy efficiency of public buildings.
In relation to another of Obama’s big-ticket items, creating a universal healthcare system, expectations are so high that it will be hard for Obama to avoid doing something quickly. Old healthcare campaigner, Senator Edward Kennedy, has promised to prepare legislation before Obama takes over. But implementation will be a much longer process and Obama has allowed himself some wiggle room by saying repeatedly during the presidential debates that his priorities were stabilizing the economy and addressing climate change.
All this action on the home front means that foreign policy is likely to take a bit of back seat. It is expected that the Guantanamo Bay detention centre will shut as soon as possible with detailed plans on how to achieve this already doing the rounds. But after McCain successfully attacked Obama’s appearance in front of 200,000 Berliners, Obama has been wary of overplaying his celebrity status abroad.
Certainly his Secretary of State will get busy rekindling old friendships and there will be some early gestures towards multilateralism. Progress on withdrawing troops from Iraq or meeting with the Iranian government, however, is likely to be more cautious.
All eyes will also be on the president-elect’s travel diary. The next global economic summit in April allows him to commence his first European trip in London without offending Sarkozy or Merkel. But watch out for a foreign tour to the developing world before the G20 meeting. He may chose to visit Latin America after showing relatively little interest during the election but don’t be surprised if he chooses to fly first to China and therefore signal that region’s importance to his presidency.
Although the 100-day FDR analogy is massively overused, President Obama is certainly going to be a busy boy after collecting the keys to the White House on January 20th.