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Obama’s First Year Marked by Squandered Opportunity, A Few Public Interest Advances

Obama’s First Year Marked by Squandered Opportunity, A Few Public Interest Advances

Public Citizen’s Guide to the State of the Union

The following is designed to provide useful information and perspective when you are preparing your stories about tonight’s State of the Union address. With each topic, we provide contact information for experts who can provide more information about the issue.

Sections include:
Financial reform
Climate change and energy
Health care
Open government
Ethical government
The Citizens United Supreme Court decision
Globalization and Trade
DC voting rights


The Obama administration has squandered the enormous opportunity bequeathed to it by the election of 2008.

Wall Street has crashed the economy. According to the official figures – which under-report unemployment – one in six people in the country are out of work or unable to find full-time work.

People know who’s to blame for the country’s deep recession, and they want them held accountable. And they want to see aggressive policies to put people back to work. But we’ve seen neither populist politics nor policies from the White House.

The Obama administration supported and has continued the Bush administration’s Wall Street bailout plan.

The administration has put forward a financial regulatory plan with some very useful components. But it has refused to embrace and take action on the bold populist policies we need – breaking up the banks, taxing financial speculation – to rein in Wall Street. It has also failed to defend the good positions it has advocated with sufficient vigor and high-level involvement.

The gentle treatment of Wall Street from the outset of the administration has framed subsequent political developments.

To its credit, the administration pushed through a desperately needed economic stimulus plan. But the stimulus and bailout – though totally distinct – became entangled in people’s minds, in significant part because the size of the stimulus plan was similar to the amount spent on the Wall Street bailout, and because the administration had embraced both.

Next came health care. Rather than identifying and campaigning against the corporate obstacles to providing affordable access to care for all, the White House cut deals with the pharmaceutical and insurance industries, and stood by as the Democratic congressional leadership developed a complicated and obtuse health care plan.

The administration has achieved some important public interest advances. To mention a few:

* Through the stimulus, it directed funding to energy efficiency and renewables.
* Many of its transparency and ethics policies are major leaps ahead from historic practice.
* It shepherded through legislation to give the Food and Drug Administration authority to regulate tobacco products.
* It asserted regulatory authority through the Clean Air Act over greenhouse gas emissions.
* It has appointed the best Occupational Safety and Health Administration director in 30 years.

Important caveats attach to many of these accomplishments, but they are significant accomplishments.

However, the grand narrative of the administration has been disappointing. In the year ahead, Public Citizen hopes to see an administration that identifies and takes on the U.S. Chamber of Commerce
lobby and the corporate interests that block policies to serve and better America.

Last week, in an astonishing display of judicial activism, the Supreme Court in its Citizens United decision gifted Corporate America with a First Amendment right to dominate our electoral process
through unlimited contributions from corporate treasuries to influence election outcomes. The administration responded with the appropriate rhetorical outrage. One test of whether Year Two of the Obama administration will show new evidence of a willingness to challenge corporate interests to protect the public will be whether the administration’s tough rhetoric is matched with comparably tough action on proposals to mitigate the harm from Citizens United.

Expert: Robert Weissman, president of Public Citizen

If you hear Obama talk about the administration’s progress in reforming the financial system, remember that: 
The Obama administration has been far too soft on Wall Street. The administration continued the Bush policy of delivering hundreds of billions of dollars in bailout money, and trillions in other financial
supports, condition-free, to the big banks and Wall Street. Call it unconditional love.

The administration proposed a financial reform package with many important and positive elements, including most significantly a strong Consumer Financial Protection Agency. Unfortunately, it did not expend much political capital to defend most of those positive elements, which were weakened in the House of Representatives and face an uncertain future in the Senate.

Wall Street has mocked the American people by paying outrageous bonuses so soon after crashing the economy and being saved by ongoing government intervention. The Obama administration repeatedly denounced these practices, but failed to do anything to curb them, with the exception of “pay czar” Ken Feinberg’s rules for the handful of most bailed-out firms.

The nation’s too-big-to-fail banks are even larger than they were before the financial crisis. For most of the past year, the administration refused to address the problem of the banks’ excessive size or other
issues of industry structure.

In the past few weeks, however, there has been a notable shift in administration positioning. It has proposed a modest tax on the largest banks. It has suggested initiatives on bank size and structure, though the details of these proposals are far weaker than headlines suggest.

Areas to watch for in the president’s address and going forward are:

Will the administration support policies to force the too-big-to-fail banks to shrink from their present size? Will the administration call for a windfall tax on bank bonuses? Will the administration endorse a
financial speculation tax, which could easily raise 10 times the revenue from the proposed bank fee? Will the administration aggressively defend the Consumer Financial Protection Agency from its opponents in the Senate? Will meaningful controls be placed on exotic financial derivatives?

Expert: Tyson Slocum, director, Public Citizen’s Energy Program

If you hear Obama talk about the administration’s progress in addressing climate change, remember that:

The climate legislation working its way through Congress is far from the plan that Obama campaigned on. While Obama supported a climate bill that required polluters to pay and helped working families with a making-work-pay dividend, the House-passed and Senate Environment Committee-passed cap-and-trade schemes hand billions of dollars to corporate utilities, gives Wall Street a lucrative $2 trillion derivatives market, relies on offsets to achieve false emission reduction targets and raises costs to working families – while bestowing windfall profits to Exelon and Goldman Sachs. In fact, this absurd cap-and-trade system is so weak that swing-state senators can be persuaded to support it only if it also includes unprecedented new nuclear power subsidies and expanded domestic fossil fuel production. It’s time to support the climate plan that swept Obama into office: a cap-and-dividend approach that auctions 100 percent of the emission allowances and returns the bulk of the money to families – not giant corporations – while implementing science-based emissions reductions.

If you hear Obama talk about the need for nuclear power to help us gain energy independence, remember that:

Cost estimates for new reactors are spiraling out of control, while nuclear power’s fatal flaws of waste and security remain unresolved. Nuclear power can’t make America energy independent, but it can bilk taxpayers out of billions of dollars – particularly since the government’s analysis estimates a 50 percent default rate on federal loan guarantees to this tarnished industry. The most cost-effective strategy to start America down the path of energy independence is public investment in energy efficiency and renewable energy such as wind, solar and geothermal.
Expert: Lena Pons, policy analyst

If you hear Obama talk about the administration’s advances in boosting fuel economy standards, remember that:

When finalized this spring, proposed standards by the Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) for fuel economy and greenhouse gas emissions from cars and light trucks will be the first major federal action to combat climate change. These standards are vitally important. As proposed, however, they fall well short of what is needed. The standards as proposed include many loopholes that will allow automakers to effectively lower the level of standards. Also, the EPA’s proposed method for accounting for electric vehicles does not reflect the emissions from electric power generation. The EPA should retain authority to take strong action on climate change and states should have the right to make advances in climate policy ahead of federal action. The country needs safe, clean, affordable transportation for everyone and investments in clean transportation options for decades to come.

Expert: Dr. Sidney Wolfe, director of Public Citizen’s Health Research Group
Expert: David Arkush, director of Public Citizen’s Congress Watch division
If you hear Obama talk about solving the health care crisis, remember that:

The administration failed to show any progressive leadership on solving the health care insurance crisis. On the contrary, it made a backroom deal with the drug industry promising not to control drug prices or support lower-priced drug imports from Canada in addition to appeasing the hospital, health insurance and other such industries at the expense of patients. The administration never pushed for lawmakers to consider the merits of a single-payer, Medicare-for-all option and even backed off the much weaker public option. 

If you hear Obama say that the medical malpractice system must be changed as part of health care reform, remember that:

The real problem is an epidemic of medical malpractice, not malpractice lawsuits. In 2009, health care reform took center stage in Congress, but lawmakers paid scant attention to patient safety in a system where between 44,000 and 98,000 patients die each year from medical errors, according to a 1999 Institute of Medicine (IOM) report. Since the IOM report, Health Grades, a health care ratings company, found that the number of deaths in hospitals from medical mistakes has increased. Yet the malpractice crisis has received little traction in the public debate. Instead, some advocated for restricting patients’ legal rights and reducing accountability for negligent medical providers, claiming that the court system is overrun with frivolous medical malpractice lawsuits. In reality, between three and seven Americans die from medical errors for every one who receives any payment for a malpractice claim. The nation needs safer medical care, not immunity for negligent doctors. So far, Congress has declined to limit patients’ legal rights in health care legislation. However, the House and Senate bills support authorizing the Secretary of Health and Human Services to award demonstration  grants to develop alternatives to medical malpractice litigation. As Congress reaches its final vote on health care reform, it must not diminish patients’ rights. To the contrary, it should improve patient safety and ensure that negligent medical providers can be held accountable for harm they cause their patients.

If you hear Obama talk about how his administration has bolstered regulatory agencies responsible for public and worker health, remember that: 
Whereas the appointments of FDA Commissioner Margaret Hamburg and Deputy Commissioner Joshua Sharfstein are certainly steps in the right direction, their failure to replace the poor leadership in FDA’s drug division bodes poorly for  improving the sorry state of decision-making in that extremely important part of the agency.

Confirmed Obama OSHA Director Dr. David Michaels is an excellent choice and we hope the rest of the Obama administration allows him to do his work. 
Expert: Craig Holman, legislative representative
If you hear Obama discuss the administration’s policy of transparency and openness, remember that:

Obama made strong statements supporting transparency on his very first day in office, and Peter Orzag, director of the Office of Management and Budget, subsequently ordered all agencies to take specific steps to affirmatively release more government information of importance to the public. The president also has ordered the government document classification process to be modified, including by shortening the time during which documents may be classified and thereby shielded from the public. While these initial steps and aspirations are laudable, the administration has also adopted troubling positions on specific issues of government secrecy. For instance, the administration has defended the use of the state secrets privilege to effectively terminate court proceedings. It also supported special legislation in Congress to override a court order requiring the release of detainee abuse photos. The administration should put its ideals into practice even when faced with the tough decisions.  

Expert: Craig Holman, legislative representative
If you hear Obama discussing the changes he has enacted to ensure the federal government is more ethical, remember that:

We have made much progress in the past year on government ethics. Obama implemented a groundbreaking ethics policy for executive branch employees. Although it is not perfect, the policy is an enormous step forward, particularly in its prohibition on executive branch employees working on matters that affect their former employers. These reforms should be refined and augmented with others, including better disclosure of potential conflicts of interests for all governmental appointees and their agreements to recuse themselves from those conflicts, a prohibition on travel junkets for executive branch officials funded by lobbying organizations and the creation of a strong enforcement agency to monitor compliance with the new lobbying and ethics rules. Finally, new executive branch ethics reforms must be codified legislatively so that they remain in effect for future administrations.

The administration has yet to reverse a Bush administration policy that interferes with state and local government contracting reforms. Several states, such as Connecticut and New Jersey, have pay-to-play restrictions that ban government contractors from making campaign contributions to those who award the contracts. The Federal Highway Administration has refused to allow such reforms to exist that affect federal contracts. The Obama administration should reverse this policy and allow pay-to-play laws to remain in full effect. Then, similar restrictions should be implemented at the federal level.

Expert: Robert Weissman, president, Public Citizen
Expert: Scott Nelson, Public Citizen attorney, member of the legal team representing current and former lawmakers in the case

If you hear Obama discussing the recent U.S. Supreme Court case (Citizens United v. Federal Election Commission) that overturned key campaign finance rules, remember that:

The court’s decision will allow greatly expanded corporate influence over our government and its policies.  To respond, we need to pass public financing for congressional elections and rejuvenate the public finance system for presidential campaigns; enact protections that will allow shareholders to control how corporations spend their money on electioneering; and amend the Constitution to keep First Amendment rights in the hands of the people and the press, where they belong. Immediately after the decision was issued, Public Citizen launched a campaign for such an amendment. Nearly 23,000 people have signed.

Expert: Lori Wallach, director of Public Citizen’s Global Trade Watch division

If you hear Obama discuss the need to move forward on a trade agenda, remember that:

During the campaign, the president made an array of detailed commitments to reform the current trade model. At issue is not whether the United States should seek expanded trade, but under what terms. Based on their lived experience of the negative outcomes, a majority of Americans oppose the status quo NAFTA-WTO trade model, polling shows. The past two elections have seen candidates win by campaigning on trade reform. A majority of House Democrats have sponsored a bill, the Trade Reform Accountability Development and Employment (TRADE) Act, which helps translate Obama’s commitment to create a trade agreement model that can benefit more people into action. Meanwhile, some large corporations and other defenders of the failed trade status quo want the Obama administration to continue the Bush trade agenda, including by passage of three NAFTA style free trade agreements Bush signed but Congress has not approved.

Expert: Angela Canterbury
Email: acanterbury@citizen.org

If you hear Obama discuss the need to move for D.C. residents to have full representation in Congress, remember that:

While the president pledged support for full voting representation for citizens in the District of Columbia, his administration has done little to advance the pending bill, the District of Columbia  House Voting Rights Act of 2009 (H.R. 157 , S. 160). D.C. citizens – who pay federal taxes, perform civic duties and fight and die in our wars – have waited far too long for the right to voting representation in Congress.
While Public Citizen supports full voting rights for U.S. citizens in the District, the DC Voting Rights Act is an important first step, providing a vote in the House. The pro-gun lobby has hijacked this bill to advance its own special interest by insisting on a rider that would make D.C. one of the most gun-friendly cities in the country. Obama must help put an end to the political games being played with rights of D.C. citizens. This should be the year Obama takes action to end taxation without representation and signs the DC Voting Rights Act into law – without the gun rider.