Obama- An Oral History
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JAMES KVAAL
The stimulus included a big increase in Pell grants, college scholarships for low-income students, and we also worked to try and encourage colleges and universities to recognize students who might not otherwise have been eligible for a Pell but had recently lost a job, or one of their parents had recently lost a job. We wanted to make sure that colleges would consider economic circumstances when they were putting together financial-aid packages.
CHRIS VAN HOLLEN
In the House, our members were interested in investing in areas that they thought would be important for the economy but also long-term economic growth. There was a major investment in clean energy. I do recall there being a major effort for an electronic-health-records investment. Now, the one area where there was disagreement was in modernizing our infrastructure—more money into the roads, bridges, light rails, transit, broadband—and it was the view of some folks in the administration, especially [National Economic Council Director] Larry Summers, that because the spend-out was not so fast, that we shouldn’t put as many resources into that.
GLENN NYE
D-Virginia, Second District, US House of Representatives (2009–2011)
It’s fair to note that a huge portion of the Recovery Act was tax cuts. So one of the reasons why it was slow to take effect was that it wasn’t all infrastructure spending and money flowing directly into the economy.
CAROLYN MALONEY
D-New York, Fourteenth District, US House of Representatives (1993–2013)
D-New York, Twelfth District, US House of Representatives (2013– )
We started a whole series of tax credits and considerations on wind, solar, electric cars—you name it—incentives to help that industry. And it just bounded forward. It’s something you didn’t read about and you didn’t see, but that was a phenomenal move toward renewable energy.
CAROL BROWNER
Well, that whole market of selling tax credits had disappeared. Clean-energy companies were taking advantage of an existing credit that made the energy they produced cost-competitive to older forms of energy production. It had a monetary value in the public markets, but the public markets had dried up. So we figured that out by allowing them to monetize it by taking that credit and letting them basically go to the Treasury Department and get a check for the value of it. That allowed them to keep a footing through those dark times, and, as other things unfolded, to actually grow. It was a hugely important part in how we produce clean energy in this country.
JAMES KVAAL
There was a strong sense from the president down that we wanted to handle this aggressively, that it was a situation where you’re losing eight hundred thousand jobs a month and it’s hard to know where the bottom was. Now, in large part, the issues were, what kind of plan you could get through Congress, and what were the moderates, particularly in the Senate, willing to accept in terms of the size of the package. That was probably the biggest single constraint.
TED KAUFMAN
We had fifty-eight [Democratic-controlled] Senate seats then, and we needed two votes for the stimulus.
HERBIE ZISKEND
Al Franken didn’t take office for a number of months because there was a recount in Minnesota.
TED KAUFMAN
My chief of staff suggested I join this bipartisan caucus group since I was going to be there for two years. “The people in the middle are going to have a lot to say about what goes on.” He was right. So I went to my first meeting. I listened for a while, and I think it was [Maine Senator] Olympia Snowe [who] got up and said, “Well, you know, $250 billion is max.” I thought to myself how absolutely ridiculous that was, and so I walked out the door. That was the end of the bipartisan caucus for me, but we needed to get those two Republican votes.
JOE LIEBERMAN
Ideologically, I was very much in favor of the stimulus act. The economy needed it, so I was never a problem on that one. Harry [Reid] and the White House, particularly Rahm, engaged me and used me pretty well. [Maine Senator Susan] Collins really was the key. She was asked to go see Harry, and Harry asked [me] to come with her. So we walked in the door of Harry’s office. Harry was there. Probably [Illinois Senator Richard] Durbin was there, but Rahm was there, and Rahm said hello to Susan, might have given her a kiss, and then looked to me. “Oh, you wouldn’t meet us without your Jewish lawyer.” That’s Rahm.
MONA SUTPHEN
Member, National Security Council, White House (1991–2000)
Deputy Chief of Staff for Policy, White House (2009–2011)
The Party of No was under way. The fact that we barely got any Republicans on the Recovery Act was kind of the warning shot.
JARED BERNSTEIN
I had been to that kind of rodeo before, but when the economy was contracting at a rate of 8 percent, I was surprised that they lacked a sense of urgency. But I think where I probably wasn’t surprised was the ways in which the legislators tried to muscle us. A lot of Republicans went, Aha, this is an opportunity to cut some taxes, and so they pushed very hard on that. Grants to businesses and things like that, whereas some of the folks on the left were pushing more for a safety net—employment insurance, food stamps—measures like that.
RAHM EMANUEL
It was hard because nobody had ever spent that type of money, a quote-unquote stimulus. We had just come off a quote-unquote bailout of the banks, and it was a bailout. And people were exhausted by the size of the number. And so all of a sudden the pushback came: That’s not what you need—a tax cut is what we need. So there were all those complications, and then you had to assemble what people wanted: tax cuts, government spending, and investments—which made it, from a messaging standpoint, a difficult thing to sell.
JOE LIEBERMAN
It got down to some real classic horse-trading. Originally, the gross number was up to a trillion dollars—but Susan [Collins], Olympia [Snowe], and Arlen [Specter] wanted it under $800 billion, maybe under $900 billion, I forget which. It’s only $100 billion here or there. Susan was bothered by a particular $1 billion for something. It might have been health-care grants of some kind that she thought were wasteful. Anyway I remember suggesting to Rahm, because I knew [what] she liked, and I was with her and Rahm in the anteroom off of Harry’s office. “What if we take that billion out and we give it to the community health centers?” She said, “Oh that’s a good idea,” and then we went to Rahm, and he said, “Great.”
RAHM EMANUEL
That number kept growing until eventually it got to around, I think, just shy of $800 [billion], because I think at that point there was the political argument [that] you couldn’t go north of $800 [billion], even though the policy people would have liked to have seen overwhelming force at all levels.
JOE LIEBERMAN
The most noble political quid-pro-quo negotiating session I had ever seen: When [Pennsylvania Senator] Arlen Specter said that he would not support the bill unless an adequate amount of money for cancer research was given to the National Cancer Institute at NIH.27 Of course, Arlen was a cancer survivor, and Harry or Rahm asked, “How much do you want?” “Ten billion.” “Ten billion—are you kidding? I mean, obviously, we want to help cure cancer, but how do we come up with ten billion? Besides, your people are screaming the total is too high.” And he held his ground. It was fascinating . . . That was a big boost to research on cancer.
HERBIE ZISKEND
Three Republicans ended up voting for the stimulus—Snowe and Collins from Maine, and Specter from Pennsylvania.
TED KAUFMAN
The idea that we could have gotten more than what we got is ludicrous. It took everything we had to get to [$787] billion. I listened to Republicans come to the Senate floor and say, “We shouldn’t do the stimulus. It’s waste.” But . . . how would the economy get running again? I mean, two or three years after the stimulus was passed, the banks still were not lending and the corporations were not investing. How would we ever get going if we hadn’t put the money in?
GENE SPERLING
The Recovery Act was passed on February 17, major decisions on the stress test28 and the auto rescue were made within the first two months, and the reality that the United States was moving with unprecedented speed to prevent a global slide into depression was so consequential.
BARNEY FRANK
I was strongly supportive of a large stimulus package and critical of the people unfair to [Obama] that it was too small. Yeah, it was too small. It was $80 billion smaller than it would have been if the three Republicans whose votes were needed—Specter, Collins, and Snowe—hadn’t insisted on shaving the $80 billion. So it’s ridiculous to blame Obama for that. He wanted it to be bigger. What we got was the maximum you could get and have sixty votes. You only needed [two Republican votes], but the three Republican moderates basically agreed that they’d go all or nothing. So he either got zero of them or three of them.
GLENN NYE
As a Blue Dog,29 I had some difficulty supporting the Recovery Act. We didn’t have a plan attached to it to pay back the money. That should have been something we included. That might have helped the American people understand, number one, that we understood spending a lot of money to try to invigorate the economy was both important and expensive, and that we would make the difficult decisions up front, to decide how we were going to pay for that in the future.
DAVID AXELROD
That came at a time when we already had a trillion-dollar deficit, which was what the Bush administration left us. And so the country was very sensitized to spending, skeptical about whether government spending—or, at least, large parts of it—could be constructive, or whether it would be just wasted money. So that was a barrier toward selling the program, and there’s no doubt that the Recovery Act did enormous good. I mean, oftentimes, as our economic advisors told us in that room in Chicago on December 16, 2008, crises that are caused by financial meltdowns tend to produce slow recoveries, and U-shaped recoveries rather than V-shaped recoveries.
BRANDON HURLBUT
So the president put Vice President Biden—the sheriff—in charge of helping administer the Recovery Act, making sure that money was going out the door. We needed to do it quick. We knew the Republican opposition was waiting for the story of how that money got into the wrong hands and ripped off the taxpayers, right? And so the vice president held these weekly meetings. How fast was this money going out? Where was it going? Did we have the safeguards in place?
SETH HARRIS
One of the best things that Barack Obama did in his presidency was pick Joe Biden to lead the implementation of the Recovery Act. It was an under-written story of the Obama presidency, what a fantastic job the vice president did on implementation with the full authority of the president. We were carefully monitored. We were forced to work together.
VAN JONES
Special Advisor, Council on Environmental Quality, White House (2009)
There were more than ten agencies that I was helping coordinate $80 billion out the door, and I was able to use my community-organizing skills inside the federal family—identifying allies in the Department of Energy, at HUD, creating these memoranda of understanding between different departments so that things could work better with this kind of one-time windfall of dollars that needed to get out fast.
BRANDON HURLBUT
The Department of Energy got a ton of stimulus money, something like $30 billion. The annual budget was $29 billion, so you’re essentially doubling their budget right away. That’s a lot for an agency to handle, especially because most of the budget went to nuclear-weapons management. Making sure nukes didn’t get in the hands of the bad guys, and also in the nuclear-waste cleanup—all these weapons in the Cold War, there was some nasty stuff that happened. We’re still cleaning up these giant toxic sites, like Hanford in Washington State. So to put $30 billion into real, clean energy, that was a lot. A good example was [how] the Office of Weatherization went into low-income homes and retrofitted them [for] the cold winter. Because these low-income folks were paying high electricity bills, and they’re the ones who could least afford that, so some government help could reduce their utilities and keep ’em warm during the winter. Who’s against reducing people’s bills? This was simple stuff. Caulking windows, putting in some insulation—this was like an $8 billion program, a lot to drop on this tiny office in the DOE.
TOM VILSACK
What I was hoping to do with our [Department of Agriculture] was to make the case that government did, in fact, work. That there were many decisions a government made every single day that were helpful to people, not harmful. That money was not being wasted, that it was actually going into improving people’s lives, and into the quality of life of their communities . . . We had our team in each state look at shovel-ready projects to jump start, whether it was a water project, or an extension of a utility line, or opportunity to expand broadband, or a business development.
BRANDON HURLBUT
Of that $30 billion that went out of the DOE, I think to like seventy-five companies, the amount of failures, you could name them. A123 batteries. Solyndra. The amounts of money that went out to successful companies or helped companies succeed had catalyzed the entire clean-energy industry. There was no utility-scale solar farm before the Recovery Act. The banks wouldn’t lend to them. This looks risky. We don’t understand solar. The banks didn’t want to go first. So the DOE did the first six! Lent that money, showed how it could be done. Those loans were repaid, and those projects were hugely successful. They created jobs, cleaned up the air, and demonstrated how to finance a big solar farm. The banks did the next twenty solar farms in the country after that. That was an amazing use of money.
DR. STEVEN CHU
If you tally all the losses, like Solyndra, where there were no politics involved, and all the loans that we knew would be paid back and you took all the losses and all the gains, there was a net gain . . . The hullabaloo about one or two failed loans was very sad. It was political posturing. It served the country very well. It not only created jobs but a bankable industry, and it drove the prices down.
From 2008 to 2015, the cost for clean technologies, ranging from solar- and wind-based energies to batteries and LED lights, dropped between 41 percent and 94 percent. US Office of Energy Efficiency & Renewable Energy
BRANDON HURLBUT
We were so far behind on clean energy when the president took office . . . We got back in that game and made progress at a rate faster than anybody could have imagined. People expected results right away, but in reality, the president was making a long-term bet. It took them time to perfect their technologies, to grow the companies, to scale up and commercialize it.
ARNE DUNCAN
The fact that, out of the stimulus, there was about $800 billion and that we got $100 billion for education? That was amazing. I had these literal nightmares, images of hundreds of thousands of teachers in an unemployment line, and not just not teaching in the classrooms, but not able to pay their bills or make their house payments or car payments. I worried about all the ripple effects in the already-hard times of having teachers unable to meet their obligations. We were able to save a couple hundred thousand teachers’ jobs. We didn’t save all the jobs we could have saved. Many teachers still got laid off in that time.
BRIAN DEESE
Living through that period, it was low in the sense that it was harrowing, but we had a mandate to try to solve these problems, as painful as they were, and all of the solutions were so terrible that there was a certain freeing sense: Let’s just figure out what’s the right thing to do and do it. In January-February-March of 2009, any potential decision on the autos was, politically, terrible. Nobody wanted us to bail out these companies. Nobody wanted them to go bankrupt. They had different constituencies across the government. It was just all deeply politically unpopular.
AUSTAN GOOLSBEE
They were running out of their $17 billion. They hadn’t made really significant efforts at restructuring or even
identifying how much the restructuring was going to need to be, and so we were jammed again.
GENE SPERLING
When we were early in the auto bailout, we were about to make calls to several leading politicians in Michigan and Ohio to go through some of the tough things we were going to deal with. Somehow, I was the first person to arrive in the Oval and the president said to me, “Geez, you’ve been in the White House for eight years. Is it always like this?” And I said, “Mr. President, when I used to consult on The West Wing, people would ask me, ‘Is it realistic?’ And I’d say, ‘It’s pretty realistic, except that you have to condense what normally happens in a year and a half to sixty minutes.’ That’s kind of what the beginning of your presidency feels like.”
JOHN DINGELL
D-Michigan, Sixteenth District, US House of Representatives (1965–2003)
D-Michigan, Fifteenth District, US House of Representatives (2003–2013)
D-Michigan, Twelfth District, US House of Representatives (2013–2015)
Dean, US House of Representatives (1995–2015)
He had to save it. If the auto industry collapsed—and it would have collapsed all three of the major US companies—[so would] the manufacturers and suppliers. The wheel makers, the seat makers, the glass makers, the steel manufacturers, and the rubber-tire makers. There’s only one state that didn’t make parts for automobiles. That’s how bad it was. They had to do it.
BRIAN DEESE
It took [GM] a while to fully absorb the magnitude of the dire financial straits that the company was in, and, then, the degree of reform and restructure that was going to be necessary. So, in that November–December 2008 period, there was a certain amount of denial and unwillingness to accept certain hard realities, and, you know, it evolved over time. By February, when the management team submitted their first version of their viability plan, they’d progressed to the idea of Okay, we’re going to have to restructure. It might well require using the bankruptcy code, but [had] not accepted the degree of the fundamental reform that needed to happen.